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

Consider the following information for Giant Corp.

Unlevered CF after tax 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.

a) What is the WACC of the firm?

b) What is the tax rate?

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