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Calculate the after tax weighted average cost of capital

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Reference no: EM132911047

Problem 1: A friend is trying to determine their company's weighted average cost of capital but is really not sure how to do. You have been advised that the cost of ordinary equity is 18%, preference shares are 9% and pre-tax cost of debt is 7%. The weight of preference shares is 15% and ordinary shares are 60%. The tax rate is 15%. Calculate the after tax Weighted Average Cost of Capital (WACC).

Reference no: EM132911047

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