. The level of a companys equity is 20000 lei and its debt ratio is...
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. The level of a companys equity is 20000 lei and its debt ratio is 0,3. In order to implement a project the corporation borrows 40% of the investment outlay at a cost of 8% increasing its debt ratio to 0,5. The beta of the companys stock is 1,2 and the expected return of the market is 10%. The project delivers during the next three years EBITs of 5000 lei, 2800 lei and 2300 lei. a). determine the level of equity used for financing this project.. b). decide whether the project is a good investment knowing that the risk-free rate of return is 7%. NPV=
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