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Assume the MM (1958) theory holds. Gaucho Services starts life with all-equity financing and a cost of equity of 14%. Suppose it refinances to a

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Assume the MM (1958) theory holds. Gaucho Services starts life with all-equity financing and a cost of equity of 14%. Suppose it refinances to a market value capital structure of 45% debt and 55% equity. The cost of debt is 9%. Calculate the new cost of equity. 18.09% 16.25% 13.09% 20.11%

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