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Find the Weighted Average Cost of Capital for a Firm

Question 58

Multiple Choice

Find the weighted average cost of capital for a firm that has a debt-to-equity ratio of 2, a tax rate of 40%, a levered cost of equity of 12% and a pre-tax cost of debt of 9%.


A) 7.6%
B) 7.968%
C) 10%
D) none of the above

Correct Answer:

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