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Calculate the after-tax weighted average cost of capital

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Question - You have been advised that the cost of ordinary equity is 5%, preference shares is 7.5%, and the pre-tax cost of debt is 6%. The weight of preference shares is 25%, ordinary shares is 60% and the rest is debt. The tax rate is 30%. Calculate the after-tax weighted average cost of capital (WACC). Please answer as a decimal to 4 decimal places.

Reference no: EM132560116

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