Question: 3. How does debt add value to CPK? Use Exhibit 9 to discuss ROE, levered betas, and the concept of risk-sharing. Exhibit TN1 provides the

3. How does debt add value to CPK?

Use Exhibit 9 to discuss ROE, levered betas, and the concept of risk-sharing.

Exhibit TN1 provides the effect of financial leverage and financial risk on firm returns.

Understanding the effect of tax shields on value and the cost of capital.

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