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QUESTION 3 Airtel Company has debt with both a face and a market value of $1,900,000. This debt has a coupon rate of 6 percent
QUESTION 3 Airtel Company has debt with both a face and a market value of $1,900,000. This debt has a coupon rate of 6 percent and pays interest annually. The expected earnings before interest and taxes are $825,000, the tax rate is 25 percent, and the unlevered cost of capital is 10.5 percent. What is the firm's cost of equity? 11.65% 11.88% 11.94% 12.15% 12.56%
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