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A MNC has a debt-to-equity ratio of 1.25 . The MNC issues corporate bonds at 7.23% post-tax. The cost of common equity for the MNC
A MNC has a debt-to-equity ratio of 1.25 . The MNC issues corporate bonds at 7.23% post-tax. The cost of common equity for the MNC is 18.53%. The MNC considers pursuing an offshore project soon. The debt capacity of the project is 51% and the required return on equity is 17.22% arising from a levered beta of 0.40154 . What is the weighted average cost of capital (WACC) of the project? a. 12.125% b. 12.252% C. 18.530% d. 13.592% e. None of the options in this question are correct. What is the unlevered beta given the debt financing component associated with the project that the MNC is considering? a. 0.19675 b. 0.23229 C. 0.30016 d. 0.32476 e. 0.50154
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