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Assume that Gadget Company's weighted average cost of capital is 10%. If Gadget has a capital structure of 50% debt and 50% equity, a 5%

Assume that Gadget Company's weighted average cost of capital is 10%. If Gadget has a capital structure of 50% debt and 50% equity, a 5% pretax cost of debt, and a 20% marginal tax rate, calculate cost of equity.

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