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Calculate the weighted average cost of capital

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A company's estimated growth rate in dividends is 7%, its current stock price is $45, and its expected annual dividend is $3. Using the DCF approach, what is the firm's rs. 5marks (Q2-B) Why is the after-tax cost of debt, rather than its before-tax cost, used to calculate the weighted average cost of capital?

Reference no: EM132611651

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