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Part D (2 marks) Lunas Ltd can borrow at 6.0%, but currently has no debt. The cost of equity is 12.5%. The current value of

Part D (2 marks) Lunas Ltd can borrow at 6.0%, but currently has no debt. The cost of equity is 12.5%. The current value of the firm is $1,000,000. What will be the value of equity if Lunas Ltd borrows $500,000 and keep the proceeds within the firm? Assume perfect capital market

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