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4 . Company A uses no debt, its beta is 1 . 2 5 and its tax rate is 3 5 % . However, the
Company A uses no debt, its beta is and its tax rate is However, the company is changing its capital structure to debt and equity. If the riskfree rate is and the expected return on the market is by how much would the capital structure shift increase the firm's cost of equity?
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