Compute the weighted average cost of capital of the firm

Reference no: EM13273789

A firm has a capital structure with $50 million in equity and $50 million of debt. The cost of equity capital is 12% and the pretax cost of debt is 7%. If the marginal tax rate of the firm is 40%,compute the weighted average cost of capital of the firm. Choose the answer that is closest.

Reference no: EM13273789

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