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Ali Inc. has a target debt-to-equity ratio of 2/3. The firm has no preferred stock. The firms bonds have a coupon rate of 9 and

Ali Inc. has a target debt-to-equity ratio of 2/3. The firm has no preferred stock. The firms bonds have a coupon rate of 9 and YTM of 8.5%, and the firm is subject to a 30% corporate tax rate. The firm has common stock with a beta of 1.2. The risk freerate on Treasury bills is 4% and the expected market risk premium is 10%. What is the minimum after-tax rate of return that Ali must earn on its investment A. 9.28%. B. 12.11%. C. 10.56%. D. 9.24%. E. 12.28%

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