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j22 j22
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A month ago
Coco Company is financed entirely by common stock which is priced to offer a 10% rate of return. Coco has an income tax rate of 40%. If the company repurchases 40% of the stock and substitutes an equal value of debt costing 7%, what is the cost on the common stock after repurchasing?

▸ 12%

▸ 11.2%

▸ 10%

▸ None of the above
Textbook 
Corporate Finance

Corporate Finance


Edition: 5th
Author:
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shalashashalasha
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A month ago
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j22 Author
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A month ago
Thanks for your help!!
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Yesterday
Good timing, thanks!
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2 hours ago
Thanks
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