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Xyx corporations capital structure calls for 60 debt and 40

XYX corporation's capital structure calls for 60% debt and 40% common equity. The company's cost of debt is 8%. Retained earnings are estimated to be $160 million. The company's cost of retained earnings is 14% and the cost of external common equity is 16%. The corporate tax rate is 30%. Calculate the WACC above the RE break point.

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Finance Basics: Xyx corporations capital structure calls for 60 debt and 40

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