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Why do investors require that the firm's cost of equity exceed its cost of debt? ANSWER Unselected Equity has a lower residual claim than debt.

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

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