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The firm's cost of equity capital is 6.2%, the market value of the firm's equity is $5 million, the firm's cost of debt capital is
The firm's cost of equity capital is 6.2%, the market value of the firm's equity is $5 million, the firm's cost of debt capital is 3%, and the market value of debt is $2.5 million. This project is 25% less risky than the firm's average operations. The riskless rate of return is 1.5% and the market return is 6%.
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To calculate the projects required rate of return you can use the weighted average cost of capital W...
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Fundamentals of Corporate Finance
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford, David A. Stangeland, Andras Marosi
1st canadian edition
978-0133400694
