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Unida Systems has 32 million shares outstanding trading for $10 per share. In addition, Unida has $96 million in outstanding debt. Suppose Unida's equity cost
Unida Systems has 32 million shares outstanding trading for $10 per share. In addition, Unida has $96 million in outstanding debt. Suppose Unida's equity cost of capital is 15%, its debt cost of capital is 8%, and the corporate tax rate is 34%.
a. What is Unida's unlevered cost of capital? (Round to one decimal place.)
b. What is Unida's after-tax debt cost of capital?
c. What is Unida's weighted average cost of capital?
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