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If it were unlevered, the overall firm beta for Wild Widgets Inc. (WWI) would be 1.5. WWI has a target debt/equity ratio of 1. The
If it were unlevered, the overall firm beta for Wild Widgets Inc. (WWI) would be 1.5. WWI has a target debt/equity ratio of 1. The expected return on the market is 0.15, and Treasury bills are currently selling to yield 0.04. WWI one-year bonds (with a face value of $1,000) carry an annual coupon of 7% and are selling for $953.36. The corporate tax rate is 33%
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