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can anyone explain to me how this person got the .4 in this problem? 4:257 Expert Q&A D + The Tip-Top Paving Co. wants to

image text in transcribedcan anyone explain to me how this person got the .4 in this problem?
4:257 Expert Q&A D + The Tip-Top Paving Co. wants to be levered at a debt to value ratio of 6. The cost of debt is 11%, the tax rate is 34%, and the cost of equity for an all equity firm is 14% What will be Tip-Top's cost of equity? Please show all steps to reach the answer! DO Expert Answer PANKAJ - 39 minutes later cost of equity will be =unlevered cost of equity+(debt/equity)*(unlevered cost of equity-cost of debt)*(1-tax rate) =14%+0.6/0.4)*(14%-11%)*(1-34%)=16.97% the above is answer.. Was this answer helpful? O p 1

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