What is the weighted cost of capital assuming a tax rate

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Question 1: A company proposes to borrow $10 million capital to expand their operations, $4 million in bonds and the rest in common stock. They can issue stocks for $43.75 by paying a dividend of $3.50 next year and maintain a growth rate of 8%. They can issue 20-year bonds for $699.07 paying 8% coupon, paid semi-annually. What is the weighted cost of capital assuming a tax rate of 35%

Reference no: EM132505899

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