### What is the weighted average cost of capital

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##### Reference no: EM13728602

The family dollar company plans a \$14 million expansion. The expansion is to be financed by selling \$6 million in new debt and \$8 million in new common stock. The before tax required rate of return on debt is 8% and the required rate of return on equity is 16%. If the company is in the 34% tax brackets what is the weighted average cost of capital.

21.45%

15.42%

12.48%

11.41%

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