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Using the following information to answer the next four questions. As the CFO of Jolly Candies, you are considering building a cookie factory. You determine

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Using the following information to answer the next four questions. As the CFO of Jolly Candies, you are considering building a cookie factory. You determine that you will use a D/E ratio of 2.0 and that the after-tax cost of debt is 5%. To get the cost of equity for the cookie factory, you plan to use information from a comparable firm, Cocoyo. The beta on Cocoyo's stock is 1.2 and its D/E ratio is 1. The risk-free rate is 6% and the market risk premium is 5.5%, and the tax rate for Cocoyo and Jolly Candies is 40%. Question a) What is the unlevered beta for Cocoyo? Question b) What is the new (Jolly Candies) cookie factory's equity beta? Question c) What is the new (Jolly Candies) cookie factory's required return on equity? Question d) What is the new (Jolly Candies) cookie factory's WACC

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