Multiple Choice
What is its cost of equity for a firm if the corporate tax rate is 40%? The firm has a debt-to-equity ratio of 1.5. If it had no debt, its cost of equity would be 16%. Its current cost of debt is 12%.
A) 22.0%.
B) 18.4%.
C) 17.44.
D) 19.6%.
Correct Answer:
Verified
Correct Answer:
Verified
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