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1 . FaceChat LTD has a D / E = 1 . 5 . Its WACC = 8 . 4 % and cost of debt

1. FaceChat LTD has a D/E =1.5. Its WACC =8.4% and cost of debt is 5.9%. The corporate tax rate =35%.(25 pts)
a. What is the cost of equity capital?
b What is the unlevered cost of equity capital?
c. What would the cost of equity be if the D/E =2.0; D/E =1.0; D/E =0?

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