(Answered) Suppose that ms macbeths investment bankers have informed

Finance

Suppose that Ms. Macbeth's investment bankers have informed her that since the new issue of debt is risky, debt holders will demand a return of 12.5%, which is 2.5% above the risk-free interest rate.a. What are rA and rE?b. Suppose that the beta of the unlevered stock was .6. What will A, E, and D be after the change to the capital structure?

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