Question: A firm is considering an average - risk project with an IRR of 6 % . The firm s pre - tax cost of debt

A firm is considering an average-risk project with an IRR of 6%. The firms pre-tax cost of debt is 5%, its cost of equity is 12%, and its tax rate is 20%. The firms debt ratio (D/(D+E)), in market values, is 0.5. The firm should

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