Multiple Choice
The Outlet has an unlevered cost of capital of 15.1 percent,a tax rate of 34 percent,and expected earnings before interest and taxes of $26,100.The company has $25,000 in bonds outstanding that have a coupon rate of 7.6 percent.The bonds are selling at par.What is the cost of equity?
A) 14.31%
B) 15.08%
C) 16.59%
D) 14.64%
E) 16.37%
Correct Answer:
Verified
Correct Answer:
Verified
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