Determine what is company weighted average cost of capital

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Problem 1: The company borrows money at 4% interest rate and the company pays income taxes at 30% rate. Investors wish to earn 15% on its stock. The company has 2 Million shares of common stock outstanding currently trading at $15 per share. The company also has $5 Million debt (bond) outstanding. What is this company's weighted average cost of capital?

Reference no: EM132841305

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