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Bung Tea has debt with both a book and a market value of $2,200. The cost of debt is 7.5 percent. Bung Tea has expected
Bung Tea has debt with both a book and a market value of $2,200. The cost of debt is 7.5 percent. Bung Tea has expected earnings before interest and taxes of $3,800. Its unlevered cost of capital is 14.5 percent and its tax rate is 35 percent.
1. What is the levered equity value?
2. What is the levered cost of equity?
3. What is the levered WACC?
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