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What will a, e, and d be after the change to the capital

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Suppose that Ms. Macbeth's investment bankers have informed her that since the new issue of debt is risky, debt holders will demand a return of 12.5%, which is 2.5% above the risk-free interest rate.a. What are rA and rE?b. Suppose that the beta of the unlevered stock was .6. What will A, E, and D be after the change to the capital structure?


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Reference no: EM13284317

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