What is the return on levered equity

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The unlevered return on equity for a company is 6.55%, the company keeps a constant debt policy and the debt-to-equity ratio is 0.7. The beta of debt is equal to 0.1 and the risk free rate is 3.25%. Knowing that the market risk premium is 4.50% and that the corporate tax rate is 26% what is the return on levered equity? Show your working

Reference no: EM13933452

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