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Company A has a beta of 1.45, while Company B has a beta of 0.85. The return on an index fund that holds the entire

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Company A has a beta of 1.45, while Company B has a beta of 0.85. The return on an index fund that holds the entire stock market is 12.0%. The risk-free rate of interest is 2%. The Corporate Tax rate is 35%. The following were financial date of the two companies: Company A S120 million $39 million 5600 million 2.50 Company B S100 million $52 million Operating Profit (EBIT) Net Income Total Shareholders' Equity Debt to Equity Ratio (D/E ratio) $800 million 1.00 Compare the Weighted Average Cost of Capital (WACC) of both companies

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