The cost of debt for a company is 5.6%, the cost of equity is 8.5%...
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The cost of debt for a company is 5.6%, the cost of equity is 8.5% and the WACC is 6.9% given the firm's target capital structure. If the new investment is funded by debt alone, and no shares will be issued to fund the new project, what is the cost of capital? a. 5.6% (1-t); with t = the firm's tax rate. b. 5.6% C. Not enough information has been provided to answer this question. d. 6.9% Clear my choice
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