Multiple Choice
Bermuda Cruises issues only common stock and coupon bonds.The firm has a debt-equity ratio of .45.The cost of equity is 17.6 percent and the pretax cost of debt is 8.9 percent.What is the capital structure weight of the firm's equity if the firm's tax rate is 35 percent?
A) 66.75 percent
B) 49.97 percent
C) 52.93 percent
D) 59.08 percent
E) 68.97 percent
Correct Answer:
Verified
Correct Answer:
Verified
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