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Determining the weighted average cost of capital

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Firm XYZ Ltd has debt valued at $14 million, ordinary shares valued at $27 million and preference shares valued at $7 million. The before-tax cost of debt is 2.2%, the cost of ordinary shares is 12.5% and the cost of preference shares is 6.2%. The tax rate is 25%. What is the firm's Weighted Average Cost of Capital?

Reference no: EM132506051

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