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Acetate, Inc., has equity with a market value of $23.1 million and debt with a market value of $9.24 million. The cost of debt is 10% per year. Treasury bills that mature in one year yield 6 percent per year, and the expected return on the market portfolio is 11 percent. The beta of Acetate's equity is 1.16. The firm pays no taxes.
A) What is Acetate's debt-equity ratio? Do not round intermediate calcuatlions and round to 2 decimal places final answer
B) What is the firm's weighted average cost of capital? Do not round intermediate calcuatlions and round to 2 decimal places final answer
C) What is the cost of capital for an otherwise identical all-equity firm? Round your answer to 2 decimal places.
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