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Info: THIS IS ALL INFO I WAS GIVEN. i HOPE YOU CAN HELP ME. Suppose Goodyear Tire and rubber Co, has: Ke: 8.5% D: 7%

Info: THIS IS ALL INFO I WAS GIVEN. i HOPE YOU CAN HELP ME.

Suppose Goodyear Tire and rubber Co, has:

Ke: 8.5%

D: 7%

T: 35%

Debt to equity ratio 2.6 and it maintains constant without changes.

With that info I need to calculate:

a. WACC

b. The unlevered cost of capital.

c. Why the companys unlevered cost of capital is less than its cost of equity and greater than its WACC?

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