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Ergo Contracting, an unlevered firm with a cost of equity of 1 8 % , announces that it will issue bonds. The firm's new capital

Ergo Contracting, an unlevered firm with a cost of equity of 18%, announces that it will issue bonds. The firm's new capital structure will be a mix of 21% equity and 79% debt. Find the new cost of equity if the cost of debt is 10% and the tax rate is 60%.

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