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    Cost of equity

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    B2. (Cost of equity) The cost of capital is 15%, the before-tax cost of debt is 9%, and the marginal
    income tax rate is 40%. The market value of debt is $50 million and the market value
    of equity is $50 million. What is the cost of equity?

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    https://brainmass.com/business/flow-to-equity/cost-equity-capital-273329

    Solution Preview

    B2. (Cost of equity) The cost of capital is 15%, the before-tax cost of debt is 9%, and the marginal
    income tax rate is ...

    Solution Summary

    The response provides steps to compute cost of equity capital.

    $2.19