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A firm has zero debt and an overall cost of capital of 10.8 percent. The firm is considering a new capital structure with 40 percent

A firm has zero debt and an overall cost of capital of 10.8 percent. The firm is considering a new capital structure with 40 percent debt at an interest rate of 6.5 percent. Assume there are no taxes or other imperfections. What will be the cost of equity capital of the levered firm?

Group of answer choices 12.52 percent 14.91 percent 16.83 percent 13.67 percent

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