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A Firm Has a Market Value of Equity of $30,000

Question 26

Multiple Choice

A firm has a market value of equity of $30,000. It borrows $7500 at 8%. If the unlevered cost of equity is 16%, what is the firm's cost of equity capital?


A) 9.0%
B) 18.0%
C) 21.6%
D) 25.2%

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