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Suppose you borrow $ 4 0 , 0 0 0 when financing a coffee shop which is valued at $ 4 5 , 0 0

Suppose you borrow $40,000 when financing a coffee shop which is valued at $45,000. You expect to generate a cash flow of $51,000 at the end of the year.
The cost of debt is 7.5%.
a. What should the value of equity be?
b. What is the cost of equity?

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