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What is the beta of the company

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Question 1 - Calculate the WACC for a company with 84,841 in equity, 78,466 in debt with an average interest rate of 0.08, a tax rate of 0.53, a beta of 1.21, a risk free rate of 0.05, and a market risk premium of 0.08.

Question 2 - Suppose a company uses only debt and internal equity to Finance its capital budget and uses CAPM to compute its cost of equity. Company estimates that its WACC is 0.08. The capital structure is 0.70 debt and 0.30 internal equity. Before tax cost of debt is 0.06 and tax rate is 0.39. Risk free rate is rRF = 0.04 and market risk premium (rm rRF) = 0.08: What is the beta of the company?

Reference no: EM133105506

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