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johnpaech johnpaech
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6 years ago
Suppose that Taggart Transcontinental currently has no debt and has an equity cost of capital of 10%.  Taggart is considering borrowing funds at a cost of 6% and using these funds to repurchase existing shares of stock.  Assume perfect capital markets.  If Taggart borrows until they achieved a debt-to-value ratio of 20%, then Taggart's levered cost of equity would be closest to:
A) 8.0%
B) 9.2%
C) 10.0%
D) 11.0%
Textbook 
Corporate Finance: The Core

Corporate Finance: The Core


Edition: 4th
Authors:
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pbrown223pbrown223
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6 years ago
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johnpaech Author
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#2
5 years ago
Thanks for helping with my corporate finance course
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