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Why do investors require that the firm's cost of equity exceed its cost of debt? ANSWER Unselected Dividend payments are not tax deductible. Unselected Equity

Why do investors require that the firm's cost of equity exceed its cost of debt? ANSWER Unselected Dividend payments are not tax deductible. Unselected Equity has a lower residual claim than debt. Unselected Interest payments are tax deductible

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