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Question 1 10 pts A company has the following capital structure: D/E ratio = 0.33, Equity Beta = 1.26, Cost of Debt = 6.4%. The
Question 1 10 pts A company has the following capital structure: D/E ratio = 0.33, Equity Beta = 1.26, Cost of Debt = 6.4%. The CEO proposes a new leverage, expressed by a target D/E ratio of 0.51. What would be the firm's new WACC? Assume that the marginal tax rate is 40%, risk-free rate is 5%, market risk premium is 5.8%, and that debt is risk less. Enter your answer as a percentage, with 2 decimals, without the percentage "%" sign. For example, if you obtain an answer equal to 0.123456, that's 12.3456%, so enter 12.35. 7.99
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