LipTea Incorporated purchases raw materials and has processing plants around the world.The firm finances 30% of its assets with debt and 70% with equity, has a 30% average tax rate, and can issue bonds at a pre-tax rate of 7%. Their standard deviation of returns is roughly 1.50 times as great as the market's returns, and has a correlation with the market of 0.45.If the risk-free rate of return is 5% and the expected return on the international market portfolio is 14%, what is the firm's WACC?

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A classic finance problem To calculate the Weighted Average Cost of Capital WACC for LipTea Incorpor... View the full answer