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Miniwave - Weighted Average Cost of Capital (WACC)

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Miniwave Corporation is attempting to estimate its weighted average cost of capital and has the following information. Miniwave is a AAA rated corporation. Currently, AAA rated debt is yielding 8% before taxes. Miniwave has a beta of 1.8. The risk-free rate is 6% and the return on the market portfolio is 12%. Miniwave has a target capital structure of 40% debt and 60% common equity. Using this information, what is Miniwave's weighted average cost of capital. The firm is in the 30% tax bracket.

11.20%
11.85%
12.32%
14.23%

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Solution Summary

The solution provides a step by step solution for the calculation of Cost of Debt, Cost Equity and WACC of Miniwave. A clear and concise answer has been provided.

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