APM Inc. is in the property management business and has a required return on its...
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APM Inc. is in the property management business and has a required return on its assets of 14%. It can borrow in the debt market at 7%. If there are no taxes and M&M's proposition II holds, what is the cost of equity if there is 30% equity financing and 70% debt financing?
A. 21.0%
B. 30.3%
C. 7.0%
D. 39.7%
E. 17.0%
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