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What is the cost on the common stock after repurchasing

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Question - Coco Company is financed entirely by common stock which is priced to offer a 10% rate of return. Coco has an income tax rate of 40%. If the company repurchases 40% of the stock and substitutes an equal value of debt costing 7%, what is the cost on the common stock after repurchasing?

Reference no: EM132972115

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