Appropriate expression for the value of the levered firm

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Reference no: EM131247313

The Modigliani-Miller theorem assumes that the firm has only two classes of securities, perpetual debt and equity. Suppose that the firm has issued a third class of securities preferred stock-and that X% of preferred dividends may be written off as an expense

a) What is the appropriate expression for the value of the levered firm?

b) What is the appropriate expression for the weighted average cost of capital?

Reference no: EM131247313

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