Cost of equity 16 before tax cost of debt 13 marginal tax rate 40 stock sells at book value what is the after tax weighted average cost of capital?
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Answer:
I have just started taking finance class in college. I found the formula to this equation on wikipedia. Did i win anything? After tax cost of debt formula before tax rate x (1 - marginal tax) Therefore: 13% x (1 - 40%) = .078 > 7.8%
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