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Apache Corporation is currently a levered firm with a debt-equity ratio of 0.35 and a pretax cost of debt of 7.4%. The firm has a

Apache Corporation is currently a levered firm with a debt-equity ratio of 0.35 and a pretax cost of debt of 7.4%. The firm has a cost of equity of 11.59%. Apache is considering switching to an all equity firm. What will the firm's cost of equity be if it makes the switch? Ignore taxes.

10.26%

11.87%

9.72%

10.85%

10.50%

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