The current structure of firm A is 10% debt with a beta of 1.52. An...
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The current structure of firm A is 10% debt with a beta of 1.52. An investment banker provides the following table.
percent financed with debt Before tax cost debt
10% 7.3%
20% 11%
40% 18%
Risk free rate 2.5%
market risk premium 6.2%
tax rate 25%
Find the cost of equity when debt is 40%. ( round to four decimal places, put as a number not percentage)
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