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Sparkle Inc. has a debt -equity ratio of 1. Its weighted average cost of capital is 11%, and its cost of debt is 9%. The

Sparkle Inc. has a debt -equity ratio of 1. Its weighted average cost of capital is 11%, and its cost of debt is 9%. The corporation tax is 35%. a] What is Sparkle`s cost of equity capital? b]What is Sparkle`s unlevered cost of equity? c] Sparkle is increasing its debt proportion in the firm[at the same cost]so that the debt equity ratio is 1.5? What is the cost of capital then?

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