medium · Investment Banking
A company's Pre-tax Cost of Debt is 8%. The Marginal Tax Rate is 25%. The Risk-free Rate is 4%, Beta is $1.2, and the Equity Risk Premium is 6%.
If the capital structure is 40% debt and 60% equity, what is the WACC?
- ≈ 7.5%
- 10.1%
- 8.4%
- ≈ 9.1%
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