What is the firm cost of equity with corporate taxes

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Question: Eccles Inc., a zero growth firm, has an expected EBIT of $140,000 and a corporate tax rate of 30%. Eccles uses $500,000 of 12.0% debt, and the cost of equity to an unlevered firm in the same risk class is 16.0%.

What is the firm's cost of equity according to MM with corporate taxes?

Reference no: EM131969465

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