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Consider the following information for Giant Corp. UCFAT is a level perpetuity. Firm Value= $ 100m Present value of tax benefits=20 million. Amount of debt=

Consider the following information for Giant Corp.

UCFAT is a level perpetuity.

Firm Value= $ 100m

Present value of tax benefits=20 million.

Amount of debt= unknown.

Interest rate on debt=10%

Unlevered cost of Equity = 20%

Depreciation= $ 1 million per year.

New Equipment= 1 million per year.

UCFAT is unlevered cash flow after tax

Question content area bottom

Part 1

Use 99 if the answer is indeterminate

a) WACC of the firm is

enter your response here

%(Round to two decimals)b) Tax Rate is

enter your response here

% (Round to two decimals)

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