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The following is known about a company and a financial market: company: e=1.5,rd=.08,D/E=1, tax rate =.3 financial market: rf=.07,rm=.13. - (a) Assuming that the MM

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The following is known about a company and a financial market: company: e=1.5,rd=.08,D/E=1, tax rate =.3 financial market: rf=.07,rm=.13. - (a) Assuming that the MM assumptions obtain, i.e. that debt is predetermined and permanent, calculate re,ra,a,d,WACC. - (b) Assuming that debt is rebalanced, calculate re,ra,a,d,WACC. - (c) Explain the differences between (a) and (b)

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