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What is Universal WACC

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Question - Universal Foods has a debt-to-value ratio of 50%, its debt is currently selling on a yield of 8%, and its cost of equity is 12%. The corporate tax rate is 40%. The company is now evaluating a new venture into home computer systems. The internal rate of return on this venture is estimated at 13.4%. WACCs of firms in the personal computer industry tend to average around 14%. What is Universal's WACC?

Reference no: EM132937323

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