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Your all-equity firm has an asset beta of 1.00. Under CAPM with a risk-free rate of 3 percent and a market risk premium of 5

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Your all-equity firm has an asset beta of 1.00. Under CAPM with a risk-free rate of 3 percent and a market risk premium of 5 percent, the equity has a required return of 8 percent. Management has decided to adjust the capital structure, changing the debt ratio to 25%. What will be new required return to equity, using Hamada's equation to adjust the equity beta? The firm faces a tax rate of 11% OOO O9% 10%

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