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Question 5 (1 point) The Backwoods Lumber Co. has a debt-equity ratio of .80. The firm's required return on assets (ie., return on unlevered equity)

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Question 5 (1 point) The Backwoods Lumber Co. has a debt-equity ratio of .80. The firm's required return on assets (ie., return on unlevered equity) is 12% and its cost of equity is 15.68%. What is the pre-tax cost of debt based on MM Proposition II with no taxes? 6.76% 7.40% 7.25% 7.00% Previous Page Next Page Page 5 of 7

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