CapCo has a capital structure that is composed of $10 million of debt and $30 million of common equity.If CapCo is in the 30% marginal tax rate,what is its WACC if the yield to investors on CapCo debt is 8% and the cost of CapCo common equity is 12%?
A) 8.3%
B) 10.4%
C) 11.0%
D) none of the above
Correct Answer:
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