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The total market value of the common stock of the Company A is $6 million, and the total value of its debt is $4 million. The treasurer estimates that the beta of the stock is currently 1.5 and that the market risk premium is 6%. The Treasury bill rate is 4%. Assume for simplicity that Company A debt is risk-free. The Company’s tax rate is 35%. What is after tax WACC for Company A?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92749000

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