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b A firm currently has a debt-equity ratio of 1/4. The debt, which is virtually riskless, pays an interest rate of 5%. The expected rate
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A firm currently has a debt-equity ratio of 1/4. The debt, which is virtually riskless, pays an interest rate of 5%. The expected rate of return on the equity is 11 %. What is the Weighted-Average Cost of Capital if the firm pays no taxes? Enter your answer as a percentage rounded to two decimal places. Do not include the percentage sign in your answer. WACC = Section Attempt 1 of 1 Given that the firm will still have a value of $80 million, what will be the value of the equity after the debt issue? Please state your answer in millions. Enter your response below. Correct response: 65 million Given that the value of the equity after the debt issue will be $65, what will be the expected return on the stock after the debt issue? Enter your answer as a percentage and round to 2 decimal places. Do not enter the percentage symbol. Enter your response below. Maynes Corporation is currently all equity financed and has a value of $80 million. Investors currently require a return of 14.40 percent on common stock. Maynes pays no taxes. Maynes plans to issue $15 million of debt with a return of 3.2 percent and use the proceeds to repurchase common stock. What will be the value of the firm after the debt issue? Please state your answer in millions. Enter your response below. Correct response: 80million This question has 4 parts, so you will be clicking verify 4 times. Given that the firm will still have a value of $80 million, what will be the value of the equity after the debt issue? Please state your answer in millions. Enter your response below. Correct response: 65 million
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