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1. A company has 2,800,000 shares outstanding that sell for $14.75 per share. The company's stock has a beta of 1.4. Assume the market risk
1. A company has 2,800,000 shares outstanding that sell for $14.75 per share. The company's stock has a beta of 1.4. Assume the market risk premium is 8.75%, the risk-free rate is 1.25%, and the corporate tax rate is 20%. What is this companys market value of equity?
2. The capital structure weights for a company are 85% equity and 15% debt. The companys after-tax cost of debt is 8% and its cost of equity is 16%. What is this company's WACC?
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