Consider a publicly traded firm whose book value of equity is $100,000, and book value...
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Consider a publicly traded firm whose book value of equity is $100,000, and book value of debt is $100,000. This firm currently has 50,000 shares of stock outstanding, priced at $15 per share, and 100 bonds outstanding, each selling at par value (where the face value is $1000 per bond). If the cost of equity for this firm is 10 percent, the cost of debt is 4 percent, and the tax rate is 35 percent, what is the WACC for this firm?
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