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(a) Explain how company risk can be captured in WACC. (3 marks) (b) Explain what would happen to WACC if a company: - Increases its

(a) Explain how company risk can be captured in WACC. (3 marks)

(b) Explain what would happen to WACC if a company:

- Increases its financial leverage.

- Is all equity financed.

- Pays a higher corporate tax rate.

(3 marks)

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