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Business, 07.11.2019 22:31 victoriavacodos

Dqz telecom is considering a project for the coming year, which will cost $50 million. dqz plans to use the following combination of debt and equity to finance the investment. issue $15 million of 20-year bonds at a price of 101, with a coupon rate of 8 percent, and flotation costs of 2 percent of par. use $35 million of funds generated from (retained) earnings. the equity market is expected to earn 12 percent. u. s. treasury bonds are currently yielding 5 percent. the beta coefficient for dqz is estimated to be 0.60. dqz is subject to an effective corporate income tax rate of 40 percent. assume that the after-tax cost of debt is 7 percent and the cost of equity is 12 percent. determine the weighted average cost of capital.

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Dqz telecom is considering a project for the coming year, which will cost $50 million. dqz plans to...

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