Multiple Choice
Douglass & Frank has a debt-equity ratio of .61. The pretax cost of debt is 7.8 percent while the unlevered cost of capital is 12.6 percent. What is the cost of equity if the tax rate is 21 percent?
A) 13.75 percent
B) 14.91 percent
C) 14.25 percent
D) 14.33 percent
E) 14.14 percent
Correct Answer:
Verified
Correct Answer:
Verified
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