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A company wants to maintain a proportion of debt/equity at 20%/80%. If the WACC is 18.6%, and the pre-tax cost of debt is 9.5%, what
A company wants to maintain a proportion of debt/equity at 20%/80%. If the WACC is 18.6%, and the pre-tax cost of debt is 9.5%, what is the cost of common equity assuming a tax rate of 35%?
A) 19.90%
B) 20.90%
C) 21.71%
D) 22.73%
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