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2. Refer to Exhibit 1 below. What is the best estimate for the firm's after-tax cost of debt? 3. Refer to Exhibit 1 below. Based

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2. Refer to Exhibit 1 below. What is the best estimate for the firm's after-tax cost of debt? 3. Refer to Exhibit 1 below. Based on the CAPM, what is the firm's cost of equity? 4. Refer to Exhibit 1 below. What is the best estimate for the weight of debt to use in calculating the WACC? Exhibit 1 A firm's abbreviated balance sheet along with additional information are provided below. The stock is currently selling for $6 per share, and its non-callable $1,000 par value, 20 -years until maturity, 7% coupon bonds with semi-annual payments are selling for $900. The stock's beta is 2 and the risk-free rate is 3%. The expected return on the market is 10%. The firm's marginal tax rate is 25%

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