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CapCo Has a Capital Structure That Is Composed of $10

question 12

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CapCo has a capital structure that is composed of $10 million of debt and $30 million of common equity.If CapCo is in the 30% marginal tax rate,what is its WACC if the yield to investors on CapCo debt is 8% and the cost of CapCo common equity is 12%?


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