Abc corp has equity with a market value of 750 million debt, Ask an Expert

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ABC corp. has equity with a market value of $750 million, debt with a market value of $330 million, and future operating lease commitments with a present value of $400 million. The firm also has a Beta of 1.2, a pre-tax cost of debt of 8%, and a marginal tax rate of 38%. What is the firm’s weighted average cost of capital if the long-term treasury rate is 4.5% and the market risk premium is 4%?

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Financial Management, Finance

Category:- Financial Management
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