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1a. A company has a beta of 1.5. The risk free rate for the market is 2% and the market return is 10%. The tax

1a. A company has a beta of 1.5. The risk free rate for the market is 2% and the market return is 10%. The tax rate is 20%. Estimate the company's before tax cost of equity.

1b. A company has a beta of 1.5. The risk free rate for the market is 2% and the market return is 10%. The tax rate is 20%. Estimate the company's after tax cost of equity.

2. A company's debt has a YTM of 8%. The company's beta equal 2.0. The risk free rate equals 3%. The market return is 10%. The tax rate = 20%. The company is financed 60% with debt, 40% with equity. What is the company's cost of capital?

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