Multiple Choice
An unlevered firm has a cost of capital of 12.46 percent and a tax rate of 35 percent.The firm is considering a new capital structure with 35 percent debt.The interest rate on the debt would be 6.68 percent.What would be the firm's levered cost of capital?
A) 14.48%
B) 14.78%
C) 13.90%
D) 14.27%
E) 13.94%
Correct Answer:
Verified
Correct Answer:
Verified
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