Multiple Choice
A firm has a debt-equity ratio of .64,a cost of equity of 13.04 percent,and a cost of debt of 8 percent.Assume the corporate tax rate is 25 percent.What would be the cost of equity if the firm were all-equity financed?
A) 11.30 percent
B) 11.41 percent
C) 13.33 percent
D) 12.42 percent
E) 12.25 percent
Correct Answer:
Verified
Correct Answer:
Verified
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