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A ﬁRm Is Worth $1,400, Has a 35% Tax Rate

Question 145

Multiple Choice

A ﬁrm is worth $1,400, has a 35% tax rate, total debt of $600, an unlevered return of 15%, and a cost of debt of 9%. What is the cost of equity?

A) 12.07%
B) 16.67%
C) 17.93%
D) 18.75%
E) 20.20%

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