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You work for Coca - Cola and want to create an amusement park in downtown Atlanta. This new project is riskier than Coca - Cola's
You work for CocaCola and want to create an amusement park in downtown Atlanta. This new project is riskier than CocaCola's current business. CocaCola has an equity beta of an optimal debttoequity ratio of and their debt currently yields That is the yield to maturity YTM on CocaCola's bonds is Six Flags currently operates amusement parks across the United States. Six Flags has an equity beta of a leverage ratio of and a YTM of If the current risk free rate is the expected return for the market is and the tax rate for both firms is what is the appropriate cost of capital that CocaCola should use to evaluate this new project?
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