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    After-tax weighted average cost of capital

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    Co. A has a debt-to-firm-value ratio of 30% and an equity-to-firm-value ratio of 70%. The required rate of return on equity of Co. A is 15% while the long-term borrowing rate is 10%. Co. A's marginal tax rate is the statutory rate of 40%. Calculate its after-tax weighted average cost of capital.

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    https://brainmass.com/business/business-math/after-tax-weighted-average-cost-capital-273033

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    Assignment 4
    (page 434 #12)

    1. Co. A has a debt-to-firm-value ratio of 30% and an equity-to-firm-value ratio of ...

    Solution Summary

    The solution calculates after-tax weighted average cost of capital.

    $2.19

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