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Brittnay | 19:02 Sat 24th Sep 2005 | Business & Finance
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Acetane Inc has equity with a market value of $20 million and debt with a market share of $10 million. The cost of the debt is 14% per annum. Treasury bills that mature in one year yield 8% per annum, the expected return on the market portfolio over the next year is 18% The beta of Acetane's equity is 0,0. The firm pays no taxes.


A) What is Acetane debt equity ratio?


B) What is firm weighted average cost of capital?


C) What is the cost of an otherwise identical all -equity firm?


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