Below is information the firm's capital structure. Use the information given to compute the weighted average cost of capital. Do this in the same spreadsheet that you computed the operating cash flows.
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Book Value of Debt
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$1,500,000,000
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Market Value of Debt
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$2,750,000,000
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Book Value of Equity
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$1,500,000,000
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Market Value of Equity
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$3,750,000,000
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Beta
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1.25
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Risk free rate
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5.25%
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Expected return on the market
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14.25%
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YTM on AAI's debt
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8.75%
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Tax rate
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35%
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