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Business, 03.05.2021 14:30 mhortin

7. A company has outstanding debt with a market value of $350 million and common stock with a market value of $450 million. Debt and equity are listed on the balance sheet for $400 million and $250 million, respectively. If its debt has a before-tax cost of 6%, a before-tax cost of equity of 12% and a corporate tax rate of 30%, what is the WACC that this firm should use to evaluate average-risk projects

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