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What is the wacc for tbq

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Problem 1: TBQ has a market capitalization of $10 million, and $2.5 million in outstanding debt. Suppose their beta is 1.20, the risk-free rate is 2%, and the expected return of the market is 8%. TBQ's debt cost of capital is 6% and their corporate tax rate is 40%. What is the WACC?

a. 3.6%
b. 6%
c. 7.8%
d. 9.2%
e. 10.2%

Reference no: EM132844359

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