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The Tree House has a pretax cost of debt of 6.7 percent and a return on assets of 11.6 percent. The debtequity ratio is .45.

The Tree House has a pretax cost of debt of 6.7 percent and a return on assets of 11.6 percent. The debtequity ratio is .45. Ignore taxes. What is the cost of equity?

9.40%

14.50%

14.25%

13.81%

15.06%

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