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Question 2 2 pts De Leon Imports is currently 100% equity financed, but would like to have a debt to equity ratio of 1.4. If
Question 2 2 pts De Leon Imports is currently 100% equity financed, but would like to have a debt to equity ratio of 1.4. If their cost of equity is currently 18.5%, what will it be after the move? Their cost of debt is 5.6% and their tax rate is 30%. Please give your answer in the form of a decimal, to the nearest 0.001. For example, if the cost of equity is 8.67%, your answer should be 0.087. Question 3 1 pts Assuming Modiglinani-Miller holds, how much would replacing 3 million dollars worth of equity financing with perpetual debt financing increase the value of your firm if your tax rate is 9%? Please report your answer to the nearest dollar
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