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In the bottom of printed page 107 in the corporate finance book, they give the equation for finding the cost of equity as :

Re = Ro + (Ro-Rd)(1-T)(D/E)

when I think it should be:

Re = Ro + (Ro-Rd(1-T))(D/E)


Is this correct?

equation is fine as is. I am sure u can c how to derive it on the web. Ur just used to seein t after debt...

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上一主题:required rate of equity return, r
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