Multiple Choice
Home Decor has a debt-equity ratio of .54. The cost of equity is 15.7 percent, the pretax cost of debt is 6.8 percent, and the tax rate is 22 percent. What will be the cost of equity if the debt-equity ratio is revised to .65?
A) 16.89 percent
B) 17.07 percent
C) 14.70 percent
D) 15.69 percent
E) 16.44 percent
Correct Answer:
Verified
Correct Answer:
Verified
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