Business and Financial Risk$-$MM Model

CFO believes that the MM and Hamada formulas for the value of a levered firm and the levered firm's cost of capital should be used because zero growth is expected.

Round your answer to three decimal places.

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Round your answers to two decimal places.

Air Tampa's $r_s$ for $$2$ million debt:

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Air Tampa's $r_s$ for $$4$ million debt:

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Air Tampa's $r_s$ for $$6$ million debt:

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rate causes $V_U$ to drop to $$12\mathrm{.}1875$ million.$)$ Do not round intermediate calculations. Round your answer to two decimal places.

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Compare this with your corresponding answer to Part c$.($Assume that growth is zero and no personal taxes for the MM$.)$

The levered beta will $-$ Select$-,$hat$(if)$ EBIT remains constant.