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Multiply the component cost of debt

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Each question will need be answered with 150 words.

1. Explain how we should go about computing the WACC for a project which uses both retained earnings and a new equity issue?

2. Explain why we multiply the component cost of debt by the marginal tax rate, TD, but don't do so for the component costs of equity or preferred stock.

Reference no: EM131318489

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