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Use the following information to answer the next three questions: Rearden Steel has $18 billion in debt, an equity capitalization of $95 billion, and an
Use the following information to answer the next three questions: Rearden Steel has $18 billion in debt, an equity capitalization of $95 billion, and an equity beta of 1.24 as reported by Yoohoo Finance. Included in Rearden's assets are $22 billion in cash and marketable securities. Assume the current risk-free rate of interest is 3%, the current market risk premium is 7%, and that there are no corporate taxes.
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To calculate Reardens Enterprise Value we need to subtract the cash and marketable securities from t...
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