Business, 11.03.2020 03:16 juliawatakip5fmg7

Gilbert & Sons is a leveraged firm. It has 300,000 shares of stock outstanding with a market price of $32 per share. The company also has $6.6 million of debt outstanding that sells at par. The pre-tax cost of debt is 9 percent and the unlevered cost of capital is 12 percent. What is the cost of equity if the tax rate is 35 percent?

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Gilbert & Sons is a leveraged firm. It has 300,000 shares of stock outstanding with a market pri...

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