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If a firm is unlevered and has a cost of equity capital of 12%, what would its cost of equity be if its debt-equity ratio

If a firm is unlevered and has a cost of equity capital of 12%, what would its cost of equity be if its debt-equity ratio became 2? The expected cost of debt is 8%. There are no taxes.

14.0%

20.0%

None of the above.

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