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Calculate the firm weighted average cost of capital

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A company has determined that its optimal capital structure consists of 40 percent debt and 60 percent equity. Given the following information, calculate the firm's weighted average cost of capital. 

rd = 6%

Tax rate = 40%

P0 = $25

Growth = 0%

D0 = $2.00

a.  6.0%

b.  6.2%

c.  7.0%

d.  7.2%

e.  8.0%

Reference no: EM131139036

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