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Ex 5. Company E has a EUR 60,000 loan with a 4% interest rate, another EUR 20,000 loan with 2,5% interest rate and pays a
Ex 5. Company E has a EUR 60,000 loan with a 4% interest rate, another EUR 20,000 loan with 2,5% interest rate and pays a 1% coupon on a bond with a nominal of EUR 100,000. The company pays a 30% corporate tax rate. Interest on the 3 debt instruments are annual. Calculate the effective interest rate and the cost of debt for the company after tax Ex 7. Calculate the beta of an investment considering that the risk free rate is 1,5%, the expected market return is 4% and the capital asset pricing model (CAPM) is 11%
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