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A firm has a debt-equity ratio of .64, a pretax cost of debt of 8.5 percent, and a required return on assets of 12.6 percent.

A firm has a debt-equity ratio of .64, a pretax cost of debt of 8.5 percent, and a required return on assets of 12.6 percent. what is the cost of equity if you ignore taxes?

a. 16.38% b. 15.22% c. 8.55% d. 8.06% e. 11.12%

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