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Unformatted text preview: Firms Weighted Average Cost of Capital (WACC) (% debt)(cost of debt)+ (% preferred stock)(cost of preferred stock)+(% common stock)(cost of common) Cost of Debt Capital YTM (1-t) Cost of Preferred Stock Capital Current Annual Dividend Current Price Cost of Equity Capital Use CAPM formula provided above Net Present Value NPV = CF 0 + CF 1 + .CF n (1+r) (1+r) n CF is the expected cash flow R = Projects cost of capital (WACC) N = Life of project...
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