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Calculate the cost of capital for operations

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Problem - Calculate the cost of capital for operations (WACC) for ACME, Inc. Use the capital asset pricing model to estimate the cost of equity capital.

U.S. Government long-term bond rate               2.25%

Market risk premium                                        5.50%

Equity beta                                                      1.20

Per-share market price                                     $100.00

Shares outstanding                                           12.5 million

Net financial obligations on balance sheet            $750.5 million

Weighted-average borrowing cost                       6.0%

Statutory tax rate                                              35.0%

Reference no: EM131568349

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