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Business, 05.04.2021 23:50 hmu323

The current market rate of return is 11% and the risk-free rate is 4%. You have been given the job of determining your firm's cost of capital. The company has 20 million shares outstanding with a current value of $30 per share. Debt represents 40 percent of your company's capital structure and the yield to maturity on the debt (i. e., before-tax cost of debt) is 7 percent. The (levered) beta of your firm's equity is 1.6 and the tax rate is 25%. What is the weighted average cost of capital (WACC or RWACC) of your firm

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