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Your firm is financed with 100 percent equity invested by a friend who has an expected return of 12 percent on her investment. Your friend
Your firm is financed with 100 percent equity invested by a friend who has an expected return of 12 percent on her investment. Your friend wants to reduce her investment by half, so you need to borrow to repay her. The cost of debt is 6 percent for you. Calculate the cost of levered equity at the new debt/equity ratio of 1:1. Group of answer choices 18 percent 24 percent 12 percent 15 percent 9 percent
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