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What is the weighted, after tax cost of capital for a firm that's capital structure consists of 25% debt (at 7%), 30% common equity (at
What is the weighted, after tax cost of capital for a firm that's capital structure consists of 25% debt (at 7%), 30% common equity (at 11%), and 45% preferred stock (at 9%). The tax rate is 40%. Explain what the WACC tells a manager and why it is important.
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