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5. Assume that there are no taxes, no transaction costs and interest rate on corporate borrowing and individual borrowing is same. Also assume that the
5. Assume that there are no taxes, no transaction costs and interest rate on corporate borrowing and individual borrowing is same. Also assume that the market is efficient. Now consider a firm with the following characteristics: 4 points Tk. 100 million Assets Debt Tk. 50 million Equity Tk. 50 million Cost of its equity is 20% Cost of debt is 10% Find out the cost of its unlevered equity. Find out its weighted average cost of capital a. b
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