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A Firm Requires an Investment of $20,000 and Borrows $10,000

Question 14

Multiple Choice

A firm requires an investment of $20,000 and borrows $10,000.If the return on equity is 20%,the tax rate is 30%,and the WACC is 12.8%,what is the firm's cost of debt?


A) 5.6%
B) 8%
C) 18.7%
D) 13.2%
E) 14%

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