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Now assume that Simtel sells its real estate services division at its estimated value and uses the funds to retire debt. This will cause

Now assume that Simtel sells its real estate services division at its estimated value and uses the funds to retire debt. This will cause its rating to rise to A and the default spread on its bonds to drop to 1.5%. Estimate the new cost of capital for Simtel. What are the assumptions you make in deriving the WACC?

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