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Consider a firm that is financed solely with equity. The ROE on the firms projects is 13%. The beta of the firm is 2, and

Consider a firm that is financed solely with equity. The ROE on the firms projects is 13%. The beta of the firm is 2, and you assume that the risk free-rate is 1.75% and the equity risk premium is 5.75%. If the firm increases its dividends, what would happen to the firm's value and why?

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