Question: M has 20% debt, 80% equity in its capital structure. If YTM of M is 4% and M's required rate of return to equity is

M has 20% debt, 80% equity in its capital structure. If YTM of M is 4% and M's required rate of return to equity is 7%, what is the WACC? (tax rate is 30%).

Correct Answer: A. 0.062

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