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Weighted average pre-tax cost of capital should be

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The market value of a company is 100 million. Other market values are as follow: 50 million of equity, 25 million of long term debt and another 25 million of short term debt.

The cost of equity is 8%, and the one for long term debt is 4% and 3% for the short term debt, with a marginal tax rate of 20%.

Weighted average pre-tax cost of capital should be?

Reference no: EM132345637

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