What is the firms weighted average cost of capital, Accounting Basics

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What is the firms weighted average cost of capital

Problem

JCT Inc.'s target capital structure is 45% debt and 55% common equity. The firm's yield to maturity on bonds is 7.5%; investors' require rate of return on the firm's common stock is 15.8%, and the firm has a 38% marginal tax rate. What is the firm's weighted average cost of capital?

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Accounting Basics: What is the firms weighted average cost of capital

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Accounting Basics: What is the firms weighted average cost of capital

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