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The company has 2,000,000 shares outstanding with acurrent stock price of $22 per share. It issued a 10-year bond 3 years ago with a coupon rate of 8%. The current yield to maturity of the bonds is 10%. The beta of the stock is 1.2; therisk-free rate is 4% and the market risk premium is 7%. The tax rate for the company is 17%.

Calculate the weighted average cost of capital for the company.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92424602

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