3. laramie trucking's ceo is considering a change to the company's capital structure, which currently consists of 25% debt and 75% equity. the cfo believes the firm should use more debt, but the ceo is reluctant to increase the debt ratio. the risk-free rate, rrf, is 5.0%, the market risk premium, rpm, is 6.0%, and the firm's tax rate is 40%. currently, the cost of equity, rs, is 11.5% as determined by the capm. what would be the estimated cost of equity if the firm used 60% debt? (hint: you must first find the current beta and then the unlevered beta to solve the problem.)
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3. laramie trucking's ceo is considering a change to the company's capital structure, which currentl...
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