A company has 100 million shares outstanding trading for $5 per share. It also has $600 million in outstanding debt. If its equity cost of capital is 12%, and its debt cost of capital is 10%, and its effective corporate tax rate is 40%, what is its weighted average cost of capital?
A company has 100 million shares outstanding trading for $5 per share. It also has $600 million in outstanding debt. If its equity cost of capital is 12%, and its debt cost of capital is 10%, and its effective corporate tax rate is 40%, what is its weighted average cost of capital?
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