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Question 18 (6 points) The TrunkLine Company has debt with both a face and a market value of 4,000. This debt has a coupon rate

Question 18 (6 points)

The TrunkLine Company has debt with both a face and a market value of 4,000. This debt has a coupon rate of 8% and pays interest annually. The expected perpetual earnings before interest and taxes is 1,800, the tax rate is 30%, and the unlevered cost of capital is 13%. What is the firm's cost of equity?

Question 18 options:

13.46%

13.79%

14.52%

14.87%

15.03%

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