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Georgia Growers has a return on assets of 12.6 percent. The company is currently an all-equity firm but is considering converting to a debt-equity ratio

Georgia Growers has a return on assets of 12.6 percent. The company is currently an all-equity firm but is considering converting to a debt-equity ratio of .4. The pre-tax cost of debt is 7.2 percent. Ignore taxes. What will the cost of equity be if the firm switches to the levered capital structure?

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