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# \$2.00Finance P7- Show all work

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• Due on Jul. 06, 2012
• Asked on Jul 06, 2012 at 4:36:12PM

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Please show all work: Imagine that Google’s total capital consists of \$150 million in debt, \$50 million in leased assets, no outstanding preferred stock, \$500 million in common stock, and \$300 million in retained earnings. Its after-tax specific costs are 7% for the debt, 8% for the leases, and 9% for the equity. a. (10 Points) Find the Weighted Average Cost of Capital b. (2.5 Points) If Google wanted to lower their WACC, what could they do? c. (2.5 Points) Why is it important for Google to know their WACC?

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"Finance P7- Show all work" Answer
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• Posted on Jul 06, 2012 at 7:39:48PM
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Preview: ... ax rate = (9/70)*100 = 12.86% - Cost of debt and lease is pre-tax only as it is paid from pre-tax profits. b. If Google wanted to lower their WACC, what could they do? ...

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Imagine that Googles total capital consists - 100% Correct Guaranteed
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• Posted on Jul 06, 2012 at 10:56:00PM
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