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Calculate the weighted average cost of capital

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Question - Weighted Average Cost of Capital - Ravenswood Corporation has the following numbers on its Audited Balance Sheet:  outstanding debt of $450,000 and common equity of $900,000. The debt has a current market value of $400,000. The company's equity has a market value of $1,050,000. Assume that the cost of equity is 9.0% and the yield to maturity on the debt is 7.0%. The relevant tax rate is 21%. Calculate the Weighted Average Cost of Capital; show all work.

Reference no: EM132952773

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