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A firm has a debt-equity ratio of 1, a cost of equity of 16 percent, and a cost of debt of 8 percent. If there

A firm has a debt-equity ratio of 1, a cost of equity of 16 percent, and a cost of debt of 8 percent. If there are no taxes or other imperfections, what is its unlevered cost of equity?

A. 8 percent

B. 10 percent

C. 12 percent

D. 14 percent

E. 16 percent

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