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Mathematics, 01.11.2019 06:31 krystalhurst97

Tangerine inc.'s target capital structure is 20 percent debt, 20 percent preferred stock, and 60 percent common equity. its bonds have a 12 percent coupon rate, semiannual interest payments, a current maturity of 20 years, and a market value equal to their par value of $1,000. the firm's marginal tax rate is 40 percent. the firm's policy is to use a risk premium of 4 percentage points when using the bond-yield-plus-risk-premium method to determine its cost of retained earnings. what is tangerine's component cost of retained earnings

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