FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Financial accounting

A company has long-term debt of $25 million,
which has an average interest rate of 11%. The
company's market capitalization is $70
million. If the tax rate is 45% and the cost of
equity is 16%, determine the weighted
average cost of capital.
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Transcribed Image Text:A company has long-term debt of $25 million, which has an average interest rate of 11%. The company's market capitalization is $70 million. If the tax rate is 45% and the cost of equity is 16%, determine the weighted average cost of capital.
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