Question: Suppose you borrow $ 1 2 0 0 0 0 when financing a coffee shop which is valued at $ 1 7 5 0 0

Suppose you borrow $120000 when financing a coffee shop which is valued at $175000. Assume that the unlevered cost of capital for the coffee shop is 7.5% and that the cost of debt is valued at 9%. What should be the cost of equity of your firm?

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