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9.11. A company currently has market capitalization of 25,000,000 and no debt. Its beta is 0.8. The annual effecive risk-free interest rate is 0.04 and

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9.11. A company currently has market capitalization of 25,000,000 and no debt. Its beta is 0.8. The annual effecive risk-free interest rate is 0.04 and the market risk premium is 0.06. The company will perform a leveraged recapitalization. The company can borrow money at the risk-free rate How much should the company borrow in order to increase the expected rate of return on equity to 0.12

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