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2. Yummy Inc has 100 million shares outstanding with a price of $9 per share, and $300 million in debt. The equity cost of capital

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2. Yummy Inc has 100 million shares outstanding with a price of $9 per share, and $300 million in debt. The equity cost of capital is 30% and the debt cost of capital is 12%. Assume that there are no taxes or costs of financial distress, so the Modigliani-Miller Propositions hold. The company decides to issue new equity and use the proceeds to repay all of its debt. a. What is the firm's market capitalization after the change in capital structure? b. What is the equity cost of capital after the change in capital structure

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