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    Corporate Finance Study Set 5
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    Exam 12: Estimating the Cost of Capital
  5. Question
    Consider the Following Equation: R<sub>wacc</sub> = R<sub>U</sub> - τ<Sub>c</sub>dr<sub>D</sub>
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Consider the Following Equation: Rwacc = RU - τcdrD

Question 55

Question 55

Multiple Choice

Consider the following equation: rwacc = rU - τcdrD
The term rU in this equation is


A) the firm's unlevered cost of debt.
B) the firm's cost of debt.
C) the project's unlevered cost of capital.
D) the project's debt-to-value ratio.

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