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A bank has $100 million in checking deposits with interest and non-interest costs of 8%, $600 million in savings and time deposits with interest and non-interest costs of 12%, and $100 million in equity capital with a cost of 26%. The bank has estimated that reserve requirements, deposit insurance fees and uncollected balances reduce the amount of money available on checking deposits by 20% and on savings and time deposits by 5%. What is the bank's before-tax cost of funds?

User Neoneye
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The answer is 13.44%.

User Kalnar
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