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consider the following information for Giant Corp. UCFAT is a level perpetuity. firm value=$100m present value of tax benefits=$20m amount of debt= unknown interest rate
consider the following information for Giant Corp.
UCFAT is a level perpetuity.
firm value=$100m
present value of tax benefits=$20m
amount of debt= unknown
interest rate on debt= 10%
unlevered cost of equity= 20%
depreciation= $1m per year
new equipment= $1m per year
A) what is the WACC of the firm?
B) what is the tax rate?
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