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Currently, Company Y has no debt (i.e., leverage=0). The CEO of Company Y considers increasing leverage (=debt/(debt+equity)) to 0.8 (i.e., 80% leverage). Currently, Compary Y's

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Currently, Company Y has no debt (i.e., leverage=0). The CEO of Company Y considers increasing leverage (=debt/(debt+equity)) to 0.8 (i.e., 80% leverage). Currently, Compary Y's CAPM beta is 2.5. The cost of debt will be 10%, riskfree rate is 5%, and market return is 20%. Assume that the corporate tax rate is ZERO. Your task, as the CFO of Company Y, is to provide the cost of capital under this proposed capital structure (i.e., 80% leverage). What is the weighted average cost of capital under the proposed capital structure (i.e., 80% leverage)

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