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We have three estimated cost for each component of capital for Arnold Corporation. One of...

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Finance

We have three estimated cost for each component of capital for Arnold Corporation. One of the financing components cost 4% the other cost 8%. One of these financing components is debt issued by the corporation and the other is common equity originally issued by the corporation years ago when it went public in its initial public offering. Which one is the after-tax cost of debt and which one is the after-tax cost of common equity? Why?

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