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Wacc questions and answers
The Longview Company has 1 million shares of common stocks outstanding:13 per share. The firm's shows a long-term debt $7 million which the firm borrowed from Chase bank at 8% interest rate 5 years ago. Longview can obtain the same loan today at an interest rate of 4%. Chase just received an offer from Chase bank to buy Longview stock has a beta of 1.2 and is in the 34% marginal tax bracket. What is the WACC?
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