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WACC Estimation

Assume that you were recently hired by a company (TII), as a financial analyst and that your boss, the treasurer, has asked you to estimate the company's Weighted Average Cost of Capital (WACC) under the assumption that NO new equity will be issued. The cost of capital should be appropriate for use in evaluating projects that are in the same risk class as the assets the company,(TII) now operates. Please use the attached file to solve the problem.

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Solution Summary

The solution explains how to calculate the component costs of capital and the WACC