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Assume there are no taxes and the value of a firm is $175 million dollars (whether the company is all equity financed or is partially

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Assume there are no taxes and the value of a firm is $175 million dollars (whether the company is all equity financed or is partially debt financed - for example whether it is 100% equity financed or is financed with 50% debt financing and 50% financing). If the cost of equity financing is 10% (if the firm is all equity financed) and the cost of debt financing is 6% and there are no changes in the asset structure (left-hand side of the balance sheet) if the financing changes, answer the following: - What is the value of the firm if the firm if the firm is all equity financed? - What is the value of the firm if the firm has 40% debt financing and 60% equity financing? - What is the cost of equity capital (expected return on equity) if the firm if the firm is all equity financed? - What is the cost of equity capital (expected return on equity) if the firm has 40% debt financing and 60% equity financing

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