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Roger Corporation operating out of Mount Hope is seeking to determines its cost of equity. Roger has an unlevered cost of capital of 10 percent,
Roger Corporation operating out of Mount Hope is seeking to determines its cost of equity. Roger has an unlevered cost of capital of 10 percent, a tax rate of 25 percent, and expected EBIT of $8,500,000. Roger has $14,500,000 of Bond debt outstanding that pays a 8 percent coupon interest annually that is currently selling at par value. What is the cost of equity?
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