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The firm's tax rate is 40%. Risk premium on the firm's stock over its own bond is 5%. The yield to maturity on the company's

The firm's tax rate is 40%. Risk premium on the firm's stock over its own bond is 5%. The yield to maturity on the company's outstanding bonds is 10%. The market risk premium is 9%. What will be the firm's cost of retained earnings by the bond-yield-plus-risk-premium approach?

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