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What is the weighted average cost of capital

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Reference no: EM132572034

Question - Ethiopian Sugar Corporation has $7,500 in bonds outstanding that are selling at par. The bonds have a 15% coupon rate and pay interest annually. The expected EBIT is $ 4,800 and the unlevered cost of capital is 21%. The tax rate is 35%.

Required -

1. What is the Cost of Equity?

2. What is the Weighted Average Cost of Capital (WACC)?

Reference no: EM132572034

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