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Finance problem: WACC

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A company has determined that its optimal capital structure consists of 30 percent debt and 70 percent equity. Given the following information, calculate the firm's weighted average cost of capital.

Rd = 6%
Tax rate = 35%
P0 = $35
Growth = 0%
D0 = $3.00

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Solution Summary

The problem deals with estimating the weighted average cost of capital.

Solution provided by:
Chidi Ngene, M. Sc.
Education
  • B. Sc., University of Nigeria
  • M. Sc., London South Bank University
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