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Company XYZ has determined that its weighted average cost of capital is 12.

Company XYZ has determined that its weighted average cost of capital is 12.5%. The capital structure of the company is made up of 75% equity and 25% debt. The before-tax cost of debt is 10%. Given a tax rate of 34%, what is XYZ's cost of common stock?

A.

13.25%

B.

14.47%

C.

15.25%

D.

16.53%

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