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An all-equity firm has a return on assets of 17.5 percent. The firm is considering converting to a debt-equity ratio of 40. The pretax cost

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An all-equity firm has a return on assets of 17.5 percent. The firm is considering converting to a debt-equity ratio of 40. The pretax cost of debt is 75 percent. Ignoring taxes, what will the cost of equity be if the firm switches to the levered capital structure

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