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Firm weighted average cost of capital

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Your firm has issued 10,000 bonds with a market price of $103 per bond. The firm also has 30,000 common shares outstanding at a price of $35 per share. If the common shares will pay a dividend of $1.50 at the end of the year and thereafter dividends will grow at a rate of 3 percent. If the after-tax yield on the firm's bonds is 6%, what is the firm's weighted average cost of capital?

Reference no: EM131483016

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