Company A is financed by 17% of debt and the rest of the company is financed by common equity. The company’s before-tax

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answerhappygod
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Company A is financed by 17% of debt and the rest of the company is financed by common equity. The company’s before-tax

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Company A is financed by 17% of debt and the rest of the company
is financed by common equity. The company’s before-tax cost of debt
is 3.8%. Currently the risk-free rate is 1.7%, the market risk
premium is 6%, and the stock has a beta of 2.1. If company A faces
a marginal tax rate of 30%, its weighted average cost of capital
(WACC) should be _____.
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