Debt paying-what is cost of equity

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Your boss has asked for your help in analyzing a company, Dragon, Inc., and you determine the following: Dragon has $50 million in debt paying 10% annually, while the equity is valued at $100 million. The WACC for the company is 12 %. If the corporate tax rate is 40%, what is Dragon’s cost of equity? (There is no preferred stock in this company.)

Reference no: EM131070615

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