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A Firm Has a Market Value of Assets of $50,000

Question 44

Multiple Choice

A firm has a market value of assets of $50,000. It borrows $10,000 at 5%. If the unlevered cost of equity is 15%, what is the firm's cost of equity capital?


A) 20.6%
B) 17.5%
C) 18.5%
D) 19.2%

Correct Answer:

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