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You are analyzing the cost of capital for a firm that is financed with 60...

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Question

Finance

You are analyzing the cost of capital for a firm that is financed with 60 percent equity and 40 percent debt. The after-tax cost of debt capital is 9 percent, while the cost of equity capital is 22 percent for the firm. What is the overall cost of capital for the firm?

Group of answer choices

20.0%

16.8%

12.2%

15.8%

Answer & Explanation Solved by verified expert
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