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For a typical firm with a given capital structure, the following relationship is always correct: R ne > R cs > WACC > R d

For a typical firm with a given capital structure, the following relationship is always correct:

Rne > Rcs > WACC > Rd (Note: WACC= weighted average cost of capital, Rd= cost of debt after tax, Rcs= cost of equity, and Rne= cost of new equity.)

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