What is its weighted average cost of capital

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Question - Corcovado Pharmaceutical's cost of debt is 7%. The risk-free rate of interest is 3%. The expected return on the market portfolio is 8%. After effective taxes, Corcovado's effective tax rate is 25%. Its optimal capital structure is 60% debt and 40% equity. If Corcovado's beta is estimated at 0.8, what is its weighted average cost of capital?

Reference no: EM133030220

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