Compute the equity beta and wacc for gt associates

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GT Associates have plans to start a widget company financed with 60 percent debt and 40 percent equity. Other widget companies are financed with 25 percent debt and 75 percent equity and have equity betas of 1.5. GT's borrowing costs will be 14 percent, the risk-free rate is 8 percent, and the expected rate of return on the market is 15 percent. The tax rate is 50 percent. Compute the equity beta and WACC for GT Associates.

Reference no: EM131426989

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