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Calculate the cost of capital for operations wacc for acme

Problem - Calculate the cost of capital for operations (WACC) for ACME, Inc. Use the capital asset pricing model to estimate the cost of equity capital.

U.S. Government long-term bond rate 2.25%

Market risk premium 5.50%

Equity beta 1.20

Per-share market price $100.00

Shares outstanding 12.5 million

Net financial obligations on balance sheet $750.5 million

Weighted-average borrowing cost 6.0%

Statutory tax rate 35.0%

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Accounting Basics: Calculate the cost of capital for operations wacc for acme

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Accounting Basics: Calculate the cost of capital for operations wacc for acme

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