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* Next period a firm will be worth $ 5 9 with 1 8 % probability, $ 8 7 with 6 3 % probability, and

*Next period a firm will be worth $59 with 18% probability, $87 with 63% probability, and $137 otherwise. The firm has one senior bond outstanding with a face value of $39 and one junior bond outstanding with a face value of $33. The senior bond has a promised return of 5%. The junior bond has a promised return of 13%. The firm's required return on assets is 14%. What is the firm's levered cost of equity? Give your answer in percentage to the nearest 0.1%.
Correct Answer: 57.0

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