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Question
A firm has a target debt-to-equity ratio of Its cost of equity equals 12 percent, the cost of debt is 8 percent, and the tax rate is 30 percent. What is the weighted average cost of capital (WACC)?
a) 10.0 percent.
b) 10.8 percent.
c) 9.8 percent.
d) 8.8 percent.
Answer
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