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Determine the company cost of equity capital

Problem: The common stock of William Tell Computers has a beta of .80. The treasury bill rate is 4 percent and the market risk premium is estimated at 8 percent. The company's capital structure is 30 percent debt paying a 8 percent interest rate, and 70 percent equity. The company's tax rate is 40 percent.

a. What is the company's cost of equity capital?

b. What is the WACC?

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