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(c) Suppose a company uses only debt and internal equity to Onance its capital budget and uses CAPM to compute its cost of equity. Company

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(c) Suppose a company uses only debt and internal equity to Onance its capital budget and uses CAPM to compute its cost of equity. Company estimates that its WACC is 12%. The capital structure is 75% debt and 25% internal equity. Before tax cost of debt is 12.5% and tax rate is 20%. Risk free rate is IRF =6% and market risk premium =8% What is the beta of the company? [6 marks] (d) With the help of relevant examples, differentiate between systematic and unsystematic risks. (8 marks)

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