Question: Alabaster Incorporated wants to be levered at a debt-to-value ratio of 6. The cost of debt is 9 percent, the tax rate is 21 percent,

Alabaster Incorporated wants to be levered at a debt-to-value ratio of 6. The cost of debt is 9 percent, the tax rate is 21 percent, and the cost of equity for an all-equity firm is 12 percent. 



What will be the firm's cost of equity?

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