Question: answer is apparently 13.25%. how did they get it? 17. Consider a firm with expected perpetual EBIT of $910, debt with a face and market

answer is apparently 13.25%. how did they get it?

17. Consider a firm with expected perpetual EBIT of $910, debt with a face and market value of $2,000 paying an 8.5% annual coupon, and an unlevered cost of capital of 12%. If the tax rate is 34%, what is the (levered) cost of equity for the firm? 13.25%

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