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Find the new cost of equity under the M-M model

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Question - The cost of equity of an all-equity firm is 2.00%. If the firm is moved to a firm with 51% equity and the remaining percentage of debt, find the new cost of equity (RE) under the M-M model 'with tax'. Assume that cost of debt before tax is 9.00% and the tax rate is 3%.

Reference no: EM133064816

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