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6. Stucco Corp. is an all-equity firm with a cost of capital of 12%. Stucco is considering issuing debt in various amounts to repurchase some
6. Stucco Corp. is an all-equity firm with a cost of capital of 12%. Stucco is considering issuing debt in various amounts to repurchase some of its equity. Stucco can issue debt with a beta of 0.3 costing 7% in any amount up to 75% of its capital structure. Stucco has a beta of 1.0. The tax rate is 25%. Fill out the table below. Debt Ratio Equity Ratio D/E 0% 100% 0% 790 5.25% 12% 12% 1.00 25% 50% 75% Ro (1-Tc) RwACC
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