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Question 3 - Elegant Cakes company has no debt and its WACC is 8.4%. The average debt-to-equity ratio for the industry is 0.12. What would

Question 3 - Elegant Cakes company has no debt and its WACC is 8.4%. The average debt-to-equity ratio for the industry is 0.12. What would Elegant Cakes cost of equity be if it took on the average amount of debt for its industry with a pre-tax cost of debt of 4%? Assume that there are no market imperfections.

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