WV Trees Has a Debt-Equity Ratio of

Multiple Choice

W.V. Trees has a debt-equity ratio of .64, a WACC of 10.8 percent, a pretax cost of debt of 7.9 percent, and a tax rate of 24 percent. What is the unlevered cost of equity capital?

A) 11.92 percent
B) 12.97 percent
C) 13.08 percent
D) 13.13 percent
E) 13.45 percent