Jemisens firm has expected earnings before interest and, Ask an Expert

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Jemisen's firm has expected earnings before interest and taxes of $1,500. Its unlevered cost of capital is 15 percent and its tax rate is 35 percent. The firm has debt with both a book and a face value of $2,400. This debt has a 7 percent coupon and pays interest annually. What is the firm's weighted average cost of capital?

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