A firm has an asset base with a market value of $5.3 million. Its debt is worth
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A firm has an asset base with a market value of $5.3 million. Its debt is worth $2.5 million. If $0.2 million is paid in interest annually and the shareholders expect a 16% annual return, what is the weighted average cost of capital assuming no corporate taxes? What is the WACC if the corporate taxes are 45%.
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