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PrivateEquity Unlimited LLC is considering an investment in a private firm, NeedMoney Inc. Because NeedMoney Inc. is private, the cost of capital is estimated using
PrivateEquity Unlimited LLC is considering an investment in a private firm, NeedMoney Inc. Because NeedMoney Inc. is private, the cost of capital is estimated using data from three publicly traded firms that operate in the same industry but have different capital structures see the table below Which of the following statements about NeedMoney Inc. are correct?
beta D beta E beta RD RE R WACC
Firm
Firm
Firm
Average
A
beta E
B
R
C
WACC
D
All the averages in the table apply to NeedMoney Inc.
E
RE
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