Multiple Choice
The Pizza Shoppe has debt with both a face and market value of $24,000 and a coupon rate of 6.4 percent.The expected earnings before interest and taxes are $21,400,the tax rate is 35 percent,and the unlevered cost of capital is 11.4 percent.What is the firm's cost of equity?
A) 13.25%
B) 12.89%
C) 13.92%
D) 12.13%
E) 14.25%
Correct Answer:
Verified
Correct Answer:
Verified
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