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the book value of a group's outstanding debt is $60 million.

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Question

the book value of a group's outstanding debt is $60 million. the debt is trading at 120% of book value and is priced to yield 12%. the 5 million outstanding shares of business stock are trading at $20 per share. the required return on stock is 18%. the tax rate is 25%. Calculate the weighted average cost of capital.

 

Paper#26246 | Written in 18-Jul-2015

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