A firm raises $23,000 of total financing, of which Equity is $11,500 and the rest is Debt.
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A firm raises $23,000 of total financing, of which Equity is $11,500 and the rest is Debt. The rate of return to investors for Equity is 9% and for debt is 5%.
The corporate tax rate is 40%, and interest is deductible as an expense for tax purposes.
Answer should be a number given as a %. That is, for example 3.18% should be answered as 3.18 rather than 3.18% or 0.0318.
What is the WACC
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