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4. DEF is a private company for which we don't observe stock prices. Find the required return on assets for DEF Corporation using the information

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4. DEF is a private company for which we don't observe stock prices. Find the required return on assets for DEF Corporation using the information below. Market risk premium =6% Current long-term treasury rate =5% Comparable firm #1's debt ratio (D/V) =50% Comparable firm #1's equity (levered) beta =1.2 Comparable firm #1's debt beta =0.3 Comparable firm #2's debt ratio (D/V) =35% Comparable firm #2 's equity beta =0.8 Comparable firm #2's debt beta =0.25 DEF Corporation's debt ratio (D/V) =20% C DEF Corporation's debt beta =0.2 DEF Corporation's tax rate =30%

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