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Q1) Consider Company ABC. ABC will have equity beta 1.25 if it was all equity financed. Market value of Debt for ABC is 1.4 million.

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Q1) Consider Company ABC. ABC will have equity beta 1.25 if it was all equity financed. Market value of Debt for ABC is 1.4 million. Market value of equity for ABC is 2.6 million. Expected return on market portfolio is 11.3%. Risk free rate is 4.9%. Corporate tax rate for company is 28%. Beta of debt is 0. a. Calculate ABC unlevered cost of equity. b. Calculate required rate of return on ABC's equity

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