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Calculate the after-tax weighted average cost of capital

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Reference no: EM133001692

Question - A friend is trying to determine their company's weighted average cost of capital but is really not sure.  You have been advised that the cost of ordinary equity is 17%, preference shares are 8% and the pre-tax cost of debt is 5%. The weight of preference shares is 15% and debt is 45%. The tax rate is 25%. Calculate the after-tax Weighted Average Cost of Capital (WACC).

Reference no: EM133001692

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