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10. a. Compute the market value of a levered corporation and its cost of capital knowing that the debt ratio is 0.25 and the perpetual

10. a. Compute the market value of a levered corporation and its cost of capital knowing that the debt ratio is 0.25 and the perpetual EBIT equals 30000 um. Total risk-free debts are in value of 70000 um and the return on debts is 4%. The corporate tax rate is 16%.

b. the return on debts

VCORP

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WACC

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FRP

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