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Company X currently is an all-equity firm with an expected return of 6.6%. It faces no corporate taxes and perfect capital ma

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Answer #1

As per the Chagg Policies, you can ask one question at a time. As we also have to follow HOMEWORKLIB POLICY, question 5 is answered here. Please pass on the other question.

Cost of Equity = Rf + Beta (Rm-Rf)

= 2.5% +1.2 * 5

=2.5% + 6%
= 8.5%

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