Multiple Choice
A firm uses only debt and equity in its capital structure. The firm's weight of debt is 45%. The firm could issue new bonds at a yield to maturity of 10% and the firm has a tax rate of 30%. If the firm's WACC is 12%, what is the firm's cost of equity?
A) 16.09%
B) 15.63%
C) 15.21%
D) 14.57%
Correct Answer:
Verified
Correct Answer:
Verified
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