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The M&M Company Is Financed by $4 Million (Market Value)in

Question 24

Multiple Choice

The M&M Company is financed by $4 million (market value) in debt and $6 million (market value) in equity.The cost of debt is 5% and the cost of equity is 10%.Calculate the weighted average cost of capital.(Assume no taxes.)


A) 10%
B) 15%
C) 8%
D) 7%

Correct Answer:

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