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Firm A Firm B Firm C 5.25% 7.35% Pre-Tax Cost of Debt 6.15% 8. 90% 8.45% 12.45% Cost of Equity Total Assets $845,350.00 $ 1,432,500.00$

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Firm A Firm B Firm C 5.25% 7.35% Pre-Tax Cost of Debt 6.15% 8. 90% 8.45% 12.45% Cost of Equity Total Assets $845,350.00 $ 1,432,500.00$ 1845,000.00 Corporate Tax Rate 29.55% 1a. Compute the expected bond size for each firm and the respective standard deviations Expected Bond Size Firm A FIRM B FIRM C 8,283.75 $12,819.25 $19,399.25 13,275.00 $28,125.00 $35,505.00 28,365.0047,122.50$65,193.75 30,319.25 $71,012.50100,096.75 23,237.50 $39,334.75$79,007.50 35,995.00 $87,718.25 132,320.75 28,537.50 $29,625.00$58,425.00 25,500.00 $31,087.50$60,112.50 31,875.0066,875.00104,687.50 12,902.50 $33,962.50 $63,050.00 40,229.00 $66,444.00$87,759.00 6,206.25 $26,643.75 $27,112.50 Expected Bond Size 284.725.75 $ 540,770.00 $832,669.50 Standard Deviation 10,616.7621,766.76$31,986.69 1b. Compute the ewpected WACC for each firm 1c. Compute the standard deviation of the WACC foreach firmassume that all covariances are nil). Firm A Firm B Firm C 5.25% 7.35% Pre-Tax Cost of Debt 6.15% 8. 90% 8.45% 12.45% Cost of Equity Total Assets $845,350.00 $ 1,432,500.00$ 1845,000.00 Corporate Tax Rate 29.55% 1a. Compute the expected bond size for each firm and the respective standard deviations Expected Bond Size Firm A FIRM B FIRM C 8,283.75 $12,819.25 $19,399.25 13,275.00 $28,125.00 $35,505.00 28,365.0047,122.50$65,193.75 30,319.25 $71,012.50100,096.75 23,237.50 $39,334.75$79,007.50 35,995.00 $87,718.25 132,320.75 28,537.50 $29,625.00$58,425.00 25,500.00 $31,087.50$60,112.50 31,875.0066,875.00104,687.50 12,902.50 $33,962.50 $63,050.00 40,229.00 $66,444.00$87,759.00 6,206.25 $26,643.75 $27,112.50 Expected Bond Size 284.725.75 $ 540,770.00 $832,669.50 Standard Deviation 10,616.7621,766.76$31,986.69 1b. Compute the ewpected WACC for each firm 1c. Compute the standard deviation of the WACC foreach firmassume that all covariances are nil)

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