The cost of equity is 13 the cost of debt is 9 and the tax, Ask an Expert

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A company is considering a new investment. The investment cost is expected to be $72 million and will return $13.5 million for 5 years in net cash flows. The ratio of debt to equity is 1 to 1. The cost of equity is 13%, the cost of debt is 9%, and the tax rate is 34%. Assuming average risk, what's the appropriate discount rate?

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