Hampton Inc has debt with both a face value and market value of $3000.

| June 9, 2016

Question
Hampton Inc has debt with both a face value and market value of $3000. This debt has a coupon rate of 7% and pays interest annually. The expected earnings before interest and taxes is $1200 the tax rate is 34% and the unlevered cost of capital is 12%. What is the firms cost of equity?

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