Multiple Choice
A firm has a debt-to-equity ratio of.5. Its cost of equity is 22%, and its cost of debt is 16%. If the corporate tax rate is.40, what would its cost of equity be if the debt-to-equity ratio were 0?
A) 22.00%.
B) 21.07%.
C) 14.00%.
D) 20.62%.
Correct Answer:
Verified
Correct Answer:
Verified
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