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Gaucho Services starts life with all-equity financing and a cost of equity of 12%. Suppose it refinances to the following market-value capital structure: Debt (

Gaucho Services starts life with all-equity financing and a cost of equity of 12%. Suppose it refinances to the following market-value capital structure:


Debt (D)	49%	at r_D = 9.0%
Equity (E)	51%

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