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Question 2(a): using the 2018 accounting and market information for Valueco below, determine the weighted average cost of capital (WACC). (12 marks) Information: Debt to

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Question 2(a): using the 2018 accounting and market information for Valueco below, determine the weighted average cost of capital (WACC). (12 marks) Information: Debt to total capitalisation 40% Cost of debt 2% Tax rate 38% Risk-free rate 1% Market risk-premium 3% Size premium 1% Unlevered beta 1.50 Question 2(b): Valueco WACC was 14.7% in 2005. Does this mean that the company is less risky than 2018? Explain the reasoning. (8 marks)

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