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The following information is given for Burgundy Plc. The before tax rate on debt is 10%, whereas the required return on equity is 20%. The total amount in use (equity + debt), V, is Rs 2m. Of that Rs. 1.4m represents the market value of its equity and Rs.600,000 equals the market value of its debt.

Required:

Given the firm's existing set of risky projects determine the rate of return demanded by Burgundy's finance providers.

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Corporate Finance, Finance

Category:- Corporate Finance
Reference No.:- M9585356

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