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Find what is weighted average cost of capital for company

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Problem 1: Swann Ltd currently has an equity cost of capital equal to 15 per cent. If the Modigliani and Miller assumptions hold (with the exception of the assumption that there is no tax) and the company's capital structure is made up of 60 per cent debt and 40 per cent equity, then what is the weighted average cost of capital for the company if the cost of debt is 8 per cent and the company is subject to a 30 per cent company tax rate?

Reference no: EM132795522

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