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Firm A has $10 million debt, $5 million cash, and $5 million equity. The risk-free rate is 5%, and the expected market return is 20%.
- Firm A has $10 million debt, $5 million cash, and $5 million equity. The risk-free rate is 5%, and the expected market return is 20%. Firm A s equity beta is 1, and its debt beta is 0. The corporate tax rate is 25%.
- What is the firms equity cost of capital?
- What is the firms debt cost of capital?
- What is the firms net debt to equity ratio ND/E?
- What is the firms unlevered cost of capital?
- What is the firms WACC?
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Contemporary Financial Management
Authors: Don Cyr, Alfred Kahl, William Rentz, R. Moyer
1st Edition
017616992X, 978-0176169923
