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Question 2a (7 marks) Catfood Corporation is financed entirely by common stock. The company employed a new finance manager and he decided to repurchase 30%

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Question 2a (7 marks) Catfood Corporation is financed entirely by common stock. The company employed a new finance manager and he decided to repurchase 30% of the stock. He would be using debt at a fixed rate of 6 % to achieve this. Calculate the expected return on its common stock after refinancing if it is currently priced to offer a return of 15%

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