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Total capital in the form of long-term debt

Problem: Smith and Jones Widget company has total capital, consisting of long-term debt and common equity of $80 million. Thirty-two million of total capital is in the form of long-term debt, which carries a cost of 12 percent. The company's equity carries a cost of 19.50 percent. If the company's tax rate is 38 percent, what is the WACC?

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Microeconomics: Total capital in the form of long-term debt

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Solution Preview :

Prepared by a verified Expert

Microeconomics: Total capital in the form of long-term debt

Reference No:- TGS01745609

Have a Question? (oR Write a Review)

Recent Questions Asked Microeconomics

Q : Cost-plus pricing approach

Q : Cash inflow from selling the old helicopter

Q : Compute the after tax of the net present value

Q : Break-even ebit and leverage

Q : Total capital in the form of long-term debt

Q : Depreciation schedule-project net present value

Q : Components of master budget

Q : What is the projects net present value

Q : Compute jmi projected operating profit

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Solution Preview :

Prepared by a verified Expert

Microeconomics: Total capital in the form of long-term debt

Reference No:- TGS01745609

Recent Questions Asked Microeconomics

Q : Cost-plus pricing approach

Q : Cash inflow from selling the old helicopter

Q : Compute the after tax of the net present value

Q : Break-even ebit and leverage

Q : Total capital in the form of long-term debt

Q : Depreciation schedule-project net present value

Q : Components of master budget

Q : What is the projects net present value

Q : Compute jmi projected operating profit

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