Multiple Choice
Travel Express has a debt-equity ratio of 0.42.The pretax cost of debt is 7.1 percent while the unlevered cost of capital is 13.6 percent.What is the cost of equity if the tax rate is 34 percent?
A) 17.52%
B) 13.78%
C) 15.40%
D) 17.83%
E) 14.30%
Correct Answer:
Verified
Correct Answer:
Verified
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