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Suppose the cost of capital of the Gadget Company is 12 percent. If Gadget has a capital structure that is 60 percent debt and 40

Suppose the cost of capital of the Gadget Company is 12 percent. If Gadget has a capital structure that is 60 percent debt and 40 percent equity, its before-tax cost of debt is 4 percent, and its marginal tax rate is 20 percent, then its cost of equity capital is closest to -?

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