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Consider a companywhim has equity : 1.2 and Bdeht : 0.5. Suppose that the riskfree rate of interest is : market E{rM}= 20%, and that

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Consider a companywhim has equity : 1.2 and Bdeht : 0.5. Suppose that the riskfree rate of interest is : market E{rM}= 20%, and that the corporate tax rate is 30%. if the companyr has 40% equity and 00% debt iI its weighted average cost of capital using both the classic CAPM and the tax adjusted CAPM

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