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d A company's beta is 1.1. The risk-free rate is 3% and the expected market return is equal to 10%. The company would like to
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A company's beta is 1.1. The risk-free rate is 3% and the expected market return is equal to 10%. The company would like to fund a project with debt and equity (shares). Funding from debt is equal to 200,000 KD and the funding from equity is equal to 300,000 KD. The yield to maturity on bonds is 7% and the marginal tax rate is equal to 25%. Answer the following questions: a. Calculate the debt weight wd W= b. Calculate the stock weight ws Ws c. Calculate the cost of equity rs. Note: Use three decimal places (example: 0.052, 0.129, 0.091,...) d. Calculate the WACC of the project. Note: Include all decimal places WACC =Step by Step Solution
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