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Your firm has a cost of equity of 14%, cost of debt of 6%, and currently has $1.60 of debt for each $1 of equity.

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Your firm has a cost of equity of 14%, cost of debt of 6%, and currently has $1.60 of debt for each $1 of equity. What is the rate of return shareholders would require if the firm were all-equity? Assume that the firm pays no corporate taxes. A) 9.69% B) 7.85% C) 9.08% D) 8.46% E) 7.23%

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