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ATR Company has a debt-to-equity ratio of 1/4

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ATR Company has a debt-to-equity ratio of 1/4. If the WACC is 19.20% and the pretax cost of debt is 11.00%, what is the cost of common equity assuming a tax rate of 49%?

a)

17.38%

b)

24.00%

c)

21.25%

d)

22.60%

e)

23.73%