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Potage's Cauldron Shop wants to maintain a target debt to asset ratio of 0.40. The overall WACC for the company is 18.6% and the cost
Potage's Cauldron Shop wants to maintain a target debt to asset ratio of 0.40. The overall WACC for the company is 18.6% and the cost of debt is 8.4% (before tax). Assuming a tax rate of 34%, what return do the stockholders of Potage require (cost of equity)? Select one: A. 23.50% B. 27.30% O C. 15.41% OD. 18.61% E. 19.49%
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