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What is after-tax weighted average cost of capital for shop

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Reference no: EM132887601

Question 1: Shop has found that its cost of common equity capital is 17 percent. It has a 7-year maturity semiannual bonds outstanding with a price of $767.03 that have a coupon rate of 7 percet. The firm is financed with $120,000,000 of common shares (market value) and $80,000,000 of debt. What is the after-tax weighted average cost of capital for Shop, if it is subject to a 35 percent marginal tax rate?

Reference no: EM132887601

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