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5) 11 Points total/ Company A's historical returns for the past three years were 6%, 8%, and 12%. Similarly, the market portfolio's returns were 10%,

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5) 11 Points total/ Company A's historical returns for the past three years were 6%, 8%, and 12%. Similarly, the market portfolio's returns were 10%, 15%, and 20%. Suppose the risk-free rate of return is 3% and that investors expect the market to return 12%. The market value of Company A's equity is $70 million, and the market value of Company A's debt is $30 million. The corporate tax rate is 35%. The weighted average cost of capital (WACC) for company A is 6.5%. a) [6 Points] Calculate Company A's beta b) [2 Points] Calculate Company A's cost of equity capital, computed with the CAPM c) [3 Points] Calculate Company A's cost of debt

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