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A firm is currently financed with $5 million in debt and $10 million in equity. The firm sells more debt which promises perpetual dividends of

A firm is currently financed with $5 million in debt and $10 million in equity. The firm sells more debt which promises perpetual dividends of $100,000 a year (starting next year) at a discount rate of 4.0%.

What is the new D/E ratio about the same of debt?

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