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consider a project with free cash flow in one year of $90,000 in a weak economy $117000 in a strong economy, with each outcome being
consider a project with free cash flow in one year of $90,000 in a weak economy $117000 in a strong economy, with each outcome being equally likely. the initial investment required for the project is $80000, and the project's cost of capital is 15%. the risk free interest rate is %5. suppose that you borrow only $45000 in financing the project. according to mm proposition II, calculate the firm's equity cost of capital
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