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kokapeli inc has a target capital structure of 40% debt and 60% common equity and has a 40% marginal tax rate. if the firm's yield to maturity on...

kokapeli inc has a target capital structure of 40% debt and 60% common equity and has a 40% marginal tax rate. if the firm's yield to maturity on bonds is 8.5% and investors require a 12% return on the firm's common stock, what is the firm's WACC

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Weighted Average Cost of Capital = Weight of... View the full answer

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  • Hey, hope this answer serves you right and I wish you all the best in your studies. Thanks!
    • mokech
    • Apr 03, 2018 at 9:59pm

Here is the solution... View the full answer

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  • Correction: WACC = (0.072) + (0.40 x 0.051) WACC = (0.072) + (0.0204) WACC = 0.0924 or 9.24%
    • dinamarcanete
    • Apr 03, 2018 at 10:02pm

The weighted average... View the full answer

To calculates WACC : Debts : 40% Common Equity : 60% Marginal Tax rate : 40% Yield bond : 8.5% return on equity : 12%... View the full answer

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