Suppose grace-sharon company uses only debt and internal, Financial Management

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Suppose grace-sharon company uses only debt and internal

Suppose Grace-Sharon 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 12%. The capital structure is 60% debt and 40% internal equity. Before tax cost of debt is 12.5 % and tax rate is 30%. Risk free rate is rRF = 2% and market risk premium = 10% What is the beta of the company?

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Financial Management: Suppose grace-sharon company uses only debt and internal

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