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Compute the before-tax cost of debt

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Question - National Co. has a debt to equity ratio of 25% and a weighted average cost of capital at 25%. The firm used the capital asset pricing model approach based on the variables readily and reliably available to determine the cost of equity. The weighted cost of equity is 18%. If the applicable tax rate is 30%, compute the before-tax cost of debt?

Reference no: EM133178370

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