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Sask Inc.'s cost of equity is 12%. The before-tax cost of debt is 5.50%, and...

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Accounting

Sask Inc.'s cost of equity is 12%. The before-tax cost of debt is 5.50%, and the tax rate is 22%. The target capital structure consists of 40% debt and 60% common equity. What is the companys WACC if all equity is from retained earnings?

a. 8.20%

b. 8.92%

c. 9.40%

d. 7.72%

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