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SMD Inc. has debt with face value of $12,000 that trades at par. This debt has a coupon rate of 6% and pays interest annually.
SMD Inc. has debt with face value of $12,000 that trades at par. This debt has a coupon rate of 6% and pays interest annually. The expected EBIT is $2,100, the tax rate is 30%, and the unlevered cost of capital is 11.7%. What is the firms cost of equity? (a) 22.46% (b) 22.87% (c) 23.20% (d) 23.79% (e) 25.14%
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