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What is Automaton's cost of capital given the below information? WACC = (weight of equity* cost of Equity)+(weight of debt * cost of debt) Cost
What is Automaton's cost of capital given the below information?
WACC = (weight of equity* cost of Equity)+(weight of debt * cost of debt)
Cost of Equity = Risk-Free Rate + *(Equity Risk Premium)
After-Tax Cost of Debt = (1-Tax Rate) * Pre-Tax Cost of Debt
Risk-Free Rate (10-Year U.S. Treasury) = 3%
The Equity Risk Premium = 4.5%
Tax Rate: 40%
Automaton's beta () = 1.2
Automaton's Market Value of Equity / Total Capital ratio = 100%
Automaton's Market Value of Debt / Total Capital = 0%
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