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Shares in Tesco are currently trading at 2.5Euro per share with an equity beta of 0.8. The expected returns on the market portfolio and the
Shares in Tesco are currently trading at 2.5Euro per share with an equity beta of 0.8. The expected returns on the market portfolio and the risk free asset are 08% and 2% respectively. In the last financial year Tesco paid finance costs of 150 M Euro on debt of 2.5bn Euro. The current capital structure of Tesco comprises 40% debt and 60% equity. The corporate tax is 30%
Calculate the cost of equity, cost of debt and the WACC and show your calculations.
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