What rate of return must shawhan supply

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Reference no: EM132019256

Based on current market values, Shawhan Supply 's capital structure is 30% debt, and 70% common stock. When using book values, capital structure is 35% debt and 65% common stock. The required return on each component is: debt,10% before tax; and common stock,18%. The marginal tax rate is 35%. What rate of return must Shawhan Supply earn on its investments if the value of the firm is to remain unchanged?

Reference no: EM132019256

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