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JNK's cost of capital if it uses no financial leverage is 11%. It has a debt equity ratio of 1.0, the cost of debt is
JNK's cost of capital if it uses no financial leverage is 11%. It has a debt equity ratio of 1.0, the cost of debt is 8% before taxes, and the tax rate is 40%. What will be the cost of equity and weighted average cost of capital if the debt to equity ratio is 1 (i.e. 50% debt and 50% equity).
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