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you have 6 min to solve it 4:33 III Not yet answered Marked out of 2.00 Flag question apple Inc. is a company that derives
you have 6 min to solve it
4:33 III Not yet answered Marked out of 2.00 Flag question apple Inc. is a company that derives equal portions of its revenues from the telecom and entertainment businesses. The company has targeted a debt to capital ratio of 80% for the firm and an after-tax cost of debt of 3% The beta for the telecom business is 0.80 and the beta for the entertainment business is 1.20, the risk free rate in US dollars is 2.5% and the equity risk premium is 5% apple is considering a new project in the entertainment business that will be funded entirely with debt. What cost of capital should you use in assessing this project? Select one: a. 8.50% b. 3.00% c. 4.10% d. 6.60% e. 7.40% Clear my choiceStep by Step Solution
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