LipTea Incorporated Purchases Raw Materials and Has Processing Plants Around

Multiple Choice

LipTea Incorporated purchases raw materials and has processing plants around the world.
The firm has an average pretax cost of debt of 8%, an average tax rate of 40%, and an international equity beta of 1.2. If the risk-free rate of return is anticipated to be 4% and the return to the international market portfolio to be 12%, what is LipTea's after-tax cost of equity?

A) 12.0%
B) 13.6%
C) 8.16%
D) 14.4%