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5. Luxury Rail Excursions Inc. has a debt/equity ratio of 0.6, a WACC of 9.5%, and a cost of debt of 4.8%. The corporate tax

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5. Luxury Rail Excursions Inc. has a debt/equity ratio of 0.6, a WACC of 9.5%, and a cost of debt of 4.8%. The corporate tax rate is 32%. Calculate the firm's cost of equity capital and unlevered cost of equity capital. Cost of equity Unlevered cost of equity 6. Continuing on the Luxury Rail example from the previous question, what would the firm's cost of equity capital be if its debt/equity ratio were 2? What if its debt/equity ratio were 1? What if its debt/equity ratio were zero? At D/E = 2: At D/E = 1: At D/E = 0

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