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CoffeeStop primarily sells coffee
CoffeeStop primarily sells coffee. It recently introduced a premium? coffee-flavoured liqueur. Suppose the firm faces a tax rate of 38% and collects the following information. If it plans to finance 15% of the new? liqueur-focused division with debt and the rest with? equity, what WACC should it use for its liqueur? division? Assume a cost of debt of 5.4%?, a? risk-free rate of 3.4% and a risk premium of 5.4%.
|
Beta |
?% Equity |
?% Debt |
|
|
CoffeeStop |
0.61 |
96% |
4% |
|
BF Liqueurs |
0.28 |
85% |
15% |
The weighted average cost of capital is____%.? (Round to two decimal? places.)
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