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What is the cost of equity

Question: A firm has a debt-to-equity ratio of 1.20. If it had no debt, its cost of equity would be 15%. Its cost of debt is 10%. What is its cost of equity if there are no taxes or other imperfections?

a. 10%
b. 15%
c. 18%
d. 21%
e. none of the above

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