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Shawhan Supply plans to maintain its optimal capital structure of 30% debt, 20% preferred stock, and 50% common stock far into the future. The require
Shawhan Supply plans to maintain its optimal capital structure of 30% debt, 20% preferred stock, and 50% common stock far into the future. The require return on each component is debt-10%; preferred stock-11%; and common stock-18%. assuming a 40% marginal tax rate what after-tax rate of return must Shawhan Supply earn on its investments if the value of the firm is to remain unchanged
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