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The firm is planning to issue 840000 of debt at 58 percent

An unlevered firm has expected earnings of $355,000 and a market value of equity of $2,100,000. The firm is planning to issue $840,000 of debt at 5.8 percent interest and use the proceeds to repurchase shares at their current market value. Ignore taxes. What will be the cost of equity after the repurchase?

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