Expected earnings before interest and taxes

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Harlan County Mining, a Kentucky-based coal mine, has expected earnings before interest and taxes of $7 million. Its unlevered cost of capital is 10.6 percent and its tax rate is 36 percent. The firm has debt with both a book and a market value of $12 million. This debt has a 4.7 percent coupon and pays interest annually. What is the firm's weighted average cost of capital?

Reference no: EM13919866

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