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Your firm's stock has a beta of 1.1, the risk-free rate is 0.3% and the market risk premium is 6%. The firm's most recent bond
Your firm's stock has a beta of 1.1, the risk-free rate is 0.3% and the market risk premium is 6%. The firm's most recent bond issue had a yield to maturity of 3.5% and the firm's marginal tax rate is 19%. Finally, the firm has a debt/equity ratio (D/E) of 0.5. What is the firm's weighted average cost of capital?
A. 3.6%
B. 4.4%
C. 5.5%
D. 7.8%
E. 6.2%
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