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j22 j22
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6 months 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
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shalashashalasha
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6 months ago
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j22 Author
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6 months ago
Thanks
loki1345
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Yesterday
I appreciate what you did here, answered it right Smiling Face with Open Mouth
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2 hours ago
This site is awesome
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