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3. A levered firm has 35% debt (D/V=0.35), cost of equity (7) of 18%, and cost of debt (7) of 7%. What would the cost
3. A levered firm has 35% debt (D/V=0.35), cost of equity (7) of 18%, and cost of debt (7) of 7%. What would the cost of equity be if the firm had no debt at all (i.e. what is )? What would the cost of equity be if the firm had 60% debt? (assume that is still 7%)
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