The pre-tax cost of debt is 9 percent and the unlevered, Financial Management

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The pre-tax cost of debt is 9 percent and the unlevered

Gilbert & Sons is a levered firm. It has 300,000 shares of stock outstanding with a market price of $32 per share. The company also has $6.6 million of debt outstanding that sells at par. The pre-tax cost of debt is 9 percent and the unlevered cost of capital is 12 percent. What is the cost of equity if the tax rate is 35 percent?

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Financial Management: The pre-tax cost of debt is 9 percent and the unlevered

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Financial Management: The pre-tax cost of debt is 9 percent and the unlevered

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