Assume a firm has 60% in equity capital and 40% in debt. The firm's beta is 1.2

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Assume a firm has 60% in equity capital and 40% in debt. The firm's beta is 1.2 and the risk free rate is 3% while the market premium is 6%. The firm's cost of debt is 5% and the firm has amarginal tax rate of 20%.

What is the firm's WACC?

Related Book For answer-question

Fundamentals of Corporate Finance

ISBN: 978-0133400694

1st canadian edition

Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford, David A. Stangeland, Andras Marosi

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Posted Date: Jul 11, 2023 03:44 AM

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Assume a firm has 60% in equity capital and 40% in debt. The firm's beta is 1.2

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Expert Answer:

The formula to calculate WACC is as follows WACC Equity Total Capital Cost ... View the full answer

Fundamentals of Corporate Finance

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