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Gamma GmbH has a debt-equity ratio of 1.5. The firms weighted average cost of capital is 15%. Its pre-tax cost of debt is 10%. Gamma

Gamma GmbH has a debt-equity ratio of 1.5. The firms weighted average cost of capital is 15%. Its pre-tax cost of debt is 10%. Gamma GmbH is subject to a corporate tax rate of 40%.

i. What is Gammas equity cost of capital?

ii. What is Gammas unlevered cost of capital?

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