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Outdoor Travel Inc. needs to estimate the cost of capital for the evaluation of capital expenditures. A typical project is financed with 25% debt-to-value ratio (i.e., D/(D+E) = 0.
Problem: a) Using a financial or economics theory, determine a simultaneous structural model and a recursive model, explaining each variable used in the models. b) Using
#question.elaborate the different methods for the estimation of simultaneous equation model in case of exact and over identification?
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