(Answered) Company x is 60 debt-financed and the expected return on

Finance

Company X is 60% debt-financed and the expected return on its debt is 6%. Its equity beta is 2. Risk-free rate of return is 4% and market risk premium is 4%. Assume a MM world with no taxes.

a) What is the company's WACC?

b) An investor has invested all her savings (€10,000) in Company X's stock.

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