ABC Company has a before-tax cost of debt of 5.57%. The cost of equity of an unlevered
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ABC Company has a before-tax cost of debt of 5.57%. The cost of equity of an unlevered firm (Note: cost of equity of unlevered firm = return on assets = cost of capital of the firm's assets = RA) is 16.78%. The D/E ratio is 4.72. What is the cost of equity? Assume a tax rate of 29.2%.
Enter your answer as a percentage rounded off to two decimal points.
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