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Business, 26.02.2020 21:30 doug26

Suppose that JB Cos. has a capital structure of 78 percent equity, 22 percent debt, and that its before-tax cost of debt is 11 percent while its cost of equity is 15 percent. If the appropriate weighted-average tax rate is 21 percent and JB estimates that they can make full use of the interest tax shield, what will be JB’s WACC?

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