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T.O. Tire Distributors has debt with both a face and a market value of $12,000. This debt has a coupon rate of 5.8 percent and
T.O. Tire Distributors has debt with both a face and a market value of $12,000. This debt has a coupon rate of 5.8 percent and pays interest annually. The expected earnings before interest and taxes are $2,100, the tax rate is 30 percent, and the unlevered cost of capital is 11.7 percent. What is the firm's cost of equity?
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