Multiple Choice
What is the 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 10%.
A) 17.4%
B) 18.4%
C) 19.6%
D) 21.4%
E) None of these.
Correct Answer:
Verified
Correct Answer:
Verified
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