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X company is not a highly leveraged company with 400 million shares, trading at $75/share and $3 billion in debt (in market value terms) outstanding.

X company is not a highly leveraged company with 400 million shares, trading at $75/share and $3 billion in debt (in market value terms) outstanding. The firm has a A3 rating with a default spread of 1.1% over the riskfree rate. a. Estimate the levered beta. b. Estimate the cost of equity.

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