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A firm with a 40% marginal tax rate has a capital structure of P60,000,000 in debt and P140,000,000 in equity.

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A firm with a 40% marginal tax rate has a capital structure of P60,000,000 in debt and P140,000,000 in equity. What is the firm's weighted cost of capital if the marginal pretax cost of debt is 12%, the firm's average pretax cost of debt outstanding is 8%, and the cost of equity is 14.5%?

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Answer Value weight Cost weight cost 60 000 000 0 3 View the full answer


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Related Book For  answer-question
Principles of Economics

Principles of Economics

ISBN: 978-1285064437

7th edition

Authors: Fred M. Gottheil

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Posted Date: April 05, 2022 05:38:37
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The weighted average cost of capital (WACC) represents a firm\'s average after-tax cost of capital from all sources, including common stock, preferred stock, bonds, and other forms of debt. WACC is the average rate that a company expects to pay to finance its assets

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