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4. Tri Co. has the following cost of debt structure: The market risk premium is 4.5%, the risk free rate is 5%, beta of unleveraged
4. Tri Co. has the following cost of debt structure: The market risk premium is 4.5%, the risk free rate is 5%, beta of unleveraged firm is 1.25, Hamada's equation b=bU[1+(1T)(wd/we)]. Tax rate T=25%. Please use the above information to answer following questions: a. If the firm uses 40% debt, what is the cost of equity of the firm, based on CAPM model? b. What is WACC of the firm? c. If FCF0=150 million, g=3%, what is the firm value
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