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an unlevered firm worth $300 million. The expected return on this firm stock is 8%. This firm announces a plan to borrow $110 million and

an unlevered firm worth $300 million. The expected return on this firm stock is 8%.

This firm announces a plan to borrow $110 million and to use this cash to pay out a one-time special dividend. The debt will have an interest rate of 2.9% per year.What is the expected return on equity after the dividend is paid?

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