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A firm is funded with $500 million in equity and $475 million in debt

Finance

A firm is funded with $500 million in equity and $475 million in debt. The yield to maturity on bonds issued by the firm is 7.85%. The tax rate is 40%. The firm has a beta of 1.15. The risk-free rate is 5%, and the market risk premium is 9%. The weighted average cost of capital for this firm is:

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