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Question 3 5 pts You are trying to determine what would happen to your firm's WACC if you increase your leverage. Your capital structure
Question 3 5 pts You are trying to determine what would happen to your firm's WACC if you increase your leverage. Your capital structure currently consists of 22% debt with a cost of 7.7% and a beta of 0.3. The market risk premium is 12.4% and the risk-free rate is 3.0%. Your firm has invested in three projects, with 35% in project 1 (beta of 0.79), 34% in project 2 (beta of 1.48), and the remaining in project 3 (beta of 1.77). The tax rate is 25%. What is will your WACC be if you increase your leverage to 38%? Input your answer in decimal (not percentage) scale, rounded to three decimal places (12.11% should be entered as 0.121).
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