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What is abc weighted average cost of capital

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Question - ABC Inc has earnings before interest and taxes of $149000. Both the book and the market value of debt is $265000. The unleveled cost of equity is 13.5% while the pre-tax cost of debt is 9%. The tax rate is 34%.

a) What's the ABC's market value of the firm? Show the relevant formula

b) What is ABC's cost of equity?

c) What is ABC's weighted average cost of capital?

Reference no: EM132788978

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