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A company has the following capital structure: D/E ratio = 0.32, Equity Beta = 1.2, Cost of Debt = 4.6%. The CEO proposes a new

A company has the following capital structure: D/E ratio = 0.32, Equity Beta = 1.2, Cost of Debt = 4.6%.

The CEO proposes a new leverage, expressed by a target D/E ratio of 0.73. What would be the firm's new WACC?

Assume that the marginal tax rate is 40%, risk-free rate is 3.1%, market risk premium is 5.4%, and that debt is risk less.

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