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A firm has a debt-equity ratio of 1. Its cost of equity is 17.4 percent and its pretax cost of debt is 7.2 percent. Assume

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A firm has a debt-equity ratio of 1. Its cost of equity is 17.4 percent and its pretax cost of debt is 7.2 percent. Assume there are no taxes or other imperfections. What would be its cost of equity if the debt-equity ratio were zero? Multiple Choice 10.9% 8.8% 11.6% 12.3%

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