Formulate weighted average cost of capital of the firm

Reference no: EM131975118

Qusetion: A firm has a capital structure with $3 in equity and $8 of debt. The cost of equity capital is 0.13 and the pretax cost of debt is 0.06. If the marginal tax rate of the firm is 0.28 compute the weighted average cost of capital of the firm. Round to four decimal places. Give answer in decimal form without commas or dollar signs.

Reference no: EM131975118

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