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Calculating wacc the interest rate

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Is the relevant cost of debt when calculating WACC the interest rate on the existing debt or the rate on the new debt? Why?

Please explain why there is a cost to using reinvested earnings; that is, why aren't reinvested earnings a free source of capital?

Identify problems that occur when estimating the cost of capital for a privately held firm.

What are some of the solutions to these problems?

Reference no: EM132796680

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