Multiple Choice
A firm has a debt-to-equity ratio of 1.75. If it had no debt,its cost of equity would be 14%. Its cost of debt is 10%. What is its cost of equity if the corporate tax rate is 50%?
A) 14.0%
B) 16.0%
C) 17.5%
D) 21.0%
E) None of these.
Correct Answer:
Verified
Correct Answer:
Verified
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