Alpha Products maintains a capital structure of 4 0 % debt and 6 0 % common equity.
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Question:
Alpha Products maintains a capital structure of debt and common equity. To finance its capital budget for next year, the firm will sell $ million in debentures at par and finance the balance of its $ million capital budget with retained earnings. Next year Alpha expects net income to grow to $ million, and dividends also are expected to increase to $ per share and to continue growing at that rate for the foreseeable future. The current market value of Alpha's stock is $ If the firm has a marginal tax rate of what is its weighted cost of capital for the coming year?
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