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A firm has 2,000,000 shares of common stock outstanding with a market price of $2.00 per share. It also has 2,000 bonds outstanding, each selling at its par value of $1,000. The bonds have a coupon rate of 7%. The firm's equity beta is 1.2, the risk-free rate is 5%, and the market risk premium is 8%. Calculate the after-tax WACC if the tax rate is 40%.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92102885

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