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What cost of capital, or discount rate, should Lotis use? (Hint: the weighted average cost of capital is equal to Ka = Wa(Ka)(1 - t)

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What cost of capital, or discount rate, should Lotis use? (Hint: the weighted average cost of capital is equal to Ka = Wa(Ka)(1 - t) + WeKe, where W. and We are the fractions of debt and equity in the capital structure, Kaand Ke are the respective costs of debt and equity, and t is the corporate ordinary tax rate.)

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