a.
To determine: The WACC.
a.
Answer to Problem 8QP
The WACC is 11.27%.
Explanation of Solution
Determine the WACC
Therefore, the WACC is 11.27%.
b.
To determine: The
b.
Answer to Problem 8QP
The cost of equity is 12.60%.
Explanation of Solution
Determine the weight of debt and equity
Therefore, the weight of debt is 36.94% and the weight of equity is 63.06%.
Determine the cost of equity
Therefore, the cost of equity is 12.60%.
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Chapter 13 Solutions
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