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The RC Corp maintains a debt-equity ratio of .6. The cost of equity for RC is 16%, the cost of debt is 11% and the marginal tax rate is 30%. What is

This question was answered on Mar 22, 2010. View the Answer
The RC Corp maintains a debt-equity ratio of .6. The cost of equity for RC is 16%, the cost of debt is 11% and the marginal tax rate is 30%. What is the weighted average cost of capital?

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Solution: WACC = (1 – D/E) * Ke + D/E * Kd * (1 – t) Where WACC – weighted average... View the full answer

This question was asked on Mar 22, 2010 and answered on Mar 22, 2010.

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