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An all equity firm has a cost of capital of 8.5 percent. The firm is considering switching to a debt-equity ratio of 1.90 with a

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An all equity firm has a cost of capital of 8.5 percent. The firm is considering switching to a debt-equity ratio of 1.90 with a pretax cost of debt of 5.4 percent. What will the firm's cost of equity be if the firm makes the switch? The tax rate is 25%

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