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What is the annual cost of equity capital

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Firm AAA has no debt and a cost of equity capital of 12% per year. Firm BBB is equivalent to firm AAA I. All ways except firm BBB has debt. Firm B's debt to equity ratio is 0.5 and interest rate that firm BBB's pays on its debt is 4%. Both firms are subject to 30% tax rate. What is the annual cost of equity capital for firm BBB?

Reference no: EM133111461

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