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Suppose you are trying to estimate the after tax cost of equity for a firm as part of the calculation of the Weighted Average Cost of Capital (WACC). If the risk-free rate is 4.2%, the expected market risk premium is 5.3%, the beta is 1.8 for this firm's equity, and the corporate tax rate is 40%, what would be the expected after tax cost of equity for this firm using CAPM? (Answer to the nearest tenth of a percent, but do not use a percent sign).

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Financial Management, Finance

Category:- Financial Management
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