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What is Books after-tax weighted average cost of capital

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Reference no: EM132973426

Question - Books Inc. is a publicly traded publishing company. It has a current stock price of $75 per share and an equity beta of 0.8. Books is consistently profitable and faces a marginal tax rate of 21%. It also maintains a target leverage ratio of 40%. Books' debt is AAA-rated and can be considered essentially risk free. The risk free rate in the economy is 5% and the market premium is 4%. You may assume that the CAPM holds. What is Books' after-tax weighted average cost of capital?

Reference no: EM132973426

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