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Suppose firm W faces a 15% cost of debt ( i d ), a tax rate of 35%, and the weighted average cost of debt
Suppose firm W faces a 15% cost of debt (id), a tax rate of 35%, and the weighted average cost of debt and equity (ia) of 10%. If the equity and debt claims on asset (E/A and D/A) are 50%, then which of the following is closest to the cost of equity (ie)?
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