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A company is planning a $80 million expansion. The expansion is to be financed by selling $30 million in new debt and $50 million in new common stock. The before-tax required rate of return on debt is 8 percent and the required rate of return on equity is 16 percent. If the company is in the 40 percent tax bracket, what is the firm's cost of capital?

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Financial Management, Finance

Category:- Financial Management
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