Multiple Choice
A levered firm has a pretax cost of debt of 8.5 percent and an unlevered cost of capital of 14 percent.The tax rate is 35 percent and the cost of equity is 15.89 percent.What is the debt-to-equity ratio?
A) .55
B) .45
C) .51
D) .47
E) .53
Correct Answer:
Verified
Correct Answer:
Verified
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