Multiple Choice
A firm has a debt-to-equity ratio of 1.75.If it had no debt, its cost of equity would be 9%.Its cost of debt is 7%.What is its cost of equity if the corporate tax rate is 50%?
A) 7.73%
B) 10.00%
C) 10.75%
D) 12.50%
E) None of the above.
Correct Answer:
Verified
Correct Answer:
Verified
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