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Goodyear maintains a constant debt-equity ratio. a. What is Goodyear's WACC? b. What is Goodyear's unlevered cost of capital? c. Explain, intuitively, why Goodyear's unlevered
Goodyear maintains a constant debt-equity ratio. a. What is Goodyear's WACC? b. What is Goodyear's unlevered cost of capital? c. Explain, intuitively, why Goodyear's unlevered cost of capital is less than its equity cost of capital and higher than its WACC. a. What is Goodyear's WACC? The WACC is %. (Round to two decimal places.) b. What is Goodyear's unlevered cost of capital? Goodyear's unlevered cost of capital is \%. (Round to two decimal places.) c. Explain, intuitively, why Goodyear's unlevered cost of capital is less than its equity cost of capital and higher than its WACC. (Choose the best answer below.) capital because the WACC excludes the benefit of the interest tax shield. capital because the WACC includes the benefit of the interest tax shield. capital because the WACC excludes the benefit of the interest tax shield. capital because the WACC includes the benefit of the interest tax shield
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