Assuming the financial manager considers that a more appropriate capital structure for the company would be 30

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Assuming the financial manager considers that a more appropriate capital structure for the company would be 30 per cent debt, 70 per cent equity, and that the company can borrow at 10 per cent, use M&M’s Proposition II (without taxes) to calculate: (1) the cost of equity, (2) the average cost of capital, and (3) the market value of the company.

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