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Before tax required rate of return on debt

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The Blue Bird Company plans a $79 million expansion. The expansion is to be financed by selling $50 million in new debt and $29 million in new common stock. The before tax required rate of return on debt is 5% and the required rate of return on equity is 14%. If the company is in the 34% tax bracket, what is the weighted average cost of capital?

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Reference no: EM13810426

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