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Fuji Inc. is registered as a business in the film-making industry and has a required return on its assets of 10%. It can borrow in

Fuji Inc. is registered as a business in the film-making industry and has a required return on its assets of 10%. It can borrow in the debt market at 5%. If there are no taxes and M&M's proposition II holds, what is the cost of equity if there is debt-to-equity ratio is 60%?

A. 12%

B. 11%

C. 10%

D. 13%

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