Question: A firm s EBIT = $ 4 0 0 , 0 0 0 forever. Unlevered cost of capital = 1 0 % This firm has

A firms EBIT = $400,000 forever.
Unlevered cost of capital =10%
This firm has a bond which has a market & face value of $1,000,000 with an annual coupon of 7%.
Calculate the WACC for this firm assuming all the MM assumptions hold except for the taxes, that is the corporate tax rate is 30%.

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