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Assume MM world with corporate tax c=40%. Risk free rate rf = 4%, market risk premium = 10%. If a firm is unlevered, equity beta
Assume MM world with corporate tax c=40%. Risk free rate rf = 4%, market risk premium = 10%. If a firm is unlevered, equity beta is 1.6. Assume that he firm issues debt and repurchases equity with the proceeds and that the new D/E = 0.25 and return on debt rD = 6%. Find new WACC.
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