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Find out the marginal cost of capital

Question:

The weighted average cost of capital for firm X is currently 10%. Firm X is considering a new project, but must raise new debt to finance the project. Debt represents 25% of the capital structure. If the after tax cost of debt will rise form 7% to 8%, what is the marginal cost of capital?

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Finance Basics: Find out the marginal cost of capital

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