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How do find the weighted average cost of capital for a firm

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Reference no: EM132756057

Problem 1: Find the weighted average cost of capital for a firm that has a debt-to-equity ratio of 1½, a cost of equity of 12% and an after-tax cost of debt of 8%. Assuming the firm is in a 20% tax bracket.

A. 9.6%
B. 7.968%
C. 14%
D. none of the above

Reference no: EM132756057

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