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RLS has 30% debt in its capital structure. Currently, the levered equity beta is 1 and...

RLS has 30% debt in its capital structure. Currently, the levered equity beta is 1 and the debt beta is 0. The T-bill rate is 4% and the expected return on the market is 14%. The firm plans to issue additional debt. The debt moves the firm to its target debt level of 40%. What is the new return on equity?

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