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Cintas Corporation is an all equity firm and has a cost of capital of 7.8 percent. The firm is considering switching to a debt-equity ratio
Cintas Corporation is an all equity firm and has a cost of capital of 7.8 percent. The firm is considering switching to a debt-equity ratio of 2.20 with a pretax cost of debt of 5.9 percent. What will the firm's cost of equity be if the firm makes the switch? The tax rate is 25%.
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