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Intro TSB Inc. has a weighted average cost of capital of 8.6%. Its debt has a market value of $23 million and its equity has

Intro

TSB Inc. has a weighted average cost of capital of 8.6%. Its debt has a market value of $23 million and its equity has a market value of $44 million. Its before-tax cost of debt is 4.8% and its marginal tax rate is 21%.

Attempt 1/2 for 10 pts.

Part 1

What is the company's cost of equity?

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