What is the company cost of capital

Reference no: EM13305287

A company is 45% financed by risk-free debt. The interest rate is 10%, the expected market risk premium is 8%, and the beta of the company's common stock is 0.55.
a. What is the company cost of capital?
b. What is the after-tax WACC, assuming that the company pays tax at a 34% rate?

Reference no: EM13305287

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