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What is going on with the levered wacc with zero taxes

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Reference no: EM132873608

Question 1. Explain in 1-2 sentences what is going on with the levered WACC with zero taxes. In other words, what does leverage do to our WACC in a world without taxes, and why?

Question 2. Explain in a single sentence why decreasing the (pre-tax) cost of debt from 5% to 1% has no effect on the WACC.

Reference no: EM132873608

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