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A firm has a debt-equity ratio of 1, a cost of debt of 4 percent, and a WACC of 10 percent. There are no taxes.

A firm has a debt-equity ratio of 1, a cost of debt of 4 percent, and a WACC of 10 percent. There are no taxes. What is the cost of equity (R_S)?

10%

12%

16%

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