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Elephant Inc., a zero growth firm, has an expected EBIT of $100,000 and a corporate tax rate of 30%. Elephant uses $500,000 of 12.0% debt,

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Elephant Inc., a zero growth firm, has an expected EBIT of $100,000 and a corporate tax rate of 30%. Elephant uses $500,000 of 12.0% debt, and the cost of equity to an unlevered firm in the same risk class is 16.0%. What is the firm's cost of equity? 28.8% 21.0% 23.3% 25.9% 32.0%

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