The required return on the market is 15. brr has debt with, Ask an Expert

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Assume the assumption underlying the AVP are relevant. Brakes and Rakes Co. Has required return on levered equity equal to 20%, required return on debt of 9%, and corporate tax rate of 25%. The required return on the market is 15%. BRR has debt with market value $30 million and equity with market value $6 million. What is BRR's unlevered cost of capital?

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