Question: Question 4 (1 point) INCLUDE WRITTEN SOLUTION Assume perfect markets and no taxes. Without leverage, Harmony's equity is worth $1,250. The Free Cash Flows to

Question 4 (1 point) INCLUDE WRITTEN SOLUTION Assume perfect markets and

Question 4 (1 point) INCLUDE WRITTEN SOLUTION Assume perfect markets and no taxes. Without leverage, Harmony's equity is worth $1,250. The Free Cash Flows to Harmony in expectation are $100 per year forever. Harmony will use debt at a cost of 5% to target weights of 1/3 debt and 2/3 equity. What will be the cost of levered equity? 8.0% 8.5% 9.0% 9.5%

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