Your firm has debt worth 200000 with a yield of 9 percent, Ask an Expert

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Your firm has debt worth $200,000, with a yield of 9 percent, and equity worth $300,000. It is growing at a 5 percent rate, and faces a 40 percent tax rate. A similar firm with no debt has a cost of equity of 12 percent. Under the MM extension with growth, what is your firm's cost of equity, rEL?

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Financial Management, Finance

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