Multiple Choice
Your firm has a debt-equity ratio of .60. Your cost of equity is 11% and your after-tax cost of debt is 7%. What will your cost of equity be if the target capital structure becomes a 50/50 mix of debt and equity?
A) 9.50%
B) 10.50%
C) 11.00%
D) 11.25%
E) 12.00%
Correct Answer:
Verified
Correct Answer:
Verified
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