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As manager of ACME industries, your company is 30% debt financed, 70% equity financed. Assuming the...

As manager of ACME industries, your company is 30% debt financed, 70% equity financed. Assuming the debt is risk-free, and assuming that your equity beta is 1.1, that treasury bills yield 1%, and that the market has an expected return of 8%, what is your weighted average cost of capital assuming a 35% tax rate? Should you invest in a new project with a 10% IRR?

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