hard · Investment Banking
Calculate the Weighted Average Cost of Capital (WACC) given: Risk-free rate = 4.0%, Equity Risk Premium = 6.0%, Relevered Beta = 1.2, Cost of Debt = 6.0%, Marginal Tax Rate = 25%, and a Target Debt/Equity ratio of 0.5 (33.3% Debt, 66.7% Equity).
- $11.2%
- $9.47%
- $8.97%
- $7.80%
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