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You were recently hired by Scheuer Media Inc. to estimate its cost of capital. The company finances its assets by 50% debt and 50% equity.
You were recently hired by Scheuer Media Inc. to estimate its cost of capital. The company finances its assets by 50% debt and 50% equity. The interest on its debt is 7.84% while equity investors typically require 12%. The company is subject to 25% effective tax. What is the WACC for the company? (note that only the cost of debt is tax deductible)
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