Compute firms weighted average cost of capital where firms

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In the spring of last year Tempe Steel learned that the firm would need to re-evaluate the company's weighted average cost of capital following a significant issue of debt. The firm now has financed 45% of its assets using debt and 55% using equity. Calculate the firm's weighted average cost of capital where the firm's borrowing rate on debt is 8%, it faces a 40% tax rate, and the common stockholders require a 20% rate of return.

Reference no: EM13452391

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