Multiple Choice
A firm is unlevered and has a cost of equity capital of 9%.What is the cost of equity if the firm becomes levered at a debt-equity ratio of 2? The expected cost of debt is 7%.(Assume no taxes.)
A) 15.0%
B) 16.0%
C) 14.5%
D) 13.0%
Correct Answer:
Verified
Correct Answer:
Verified
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