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Question
A firm has a target debt-to-equity ratio of 3. Its cost of equity equals 12 percent, its cost of debt is 9 percent, and the tax rate is 34 percent. What is the WACC?
a) 7.46 percent.
b) 8.97 percent.
d) 10.00 percent.
d) 10.49 percent.
Answer
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