Multiple Choice
Using the original Modigliani and Miller assumptions if a firm's cost of capital is 12% when it is all equity financed and it's cost of debt is 8%, the cost of equity will be ________% when the firm is financed with equal amount of debt and equity.
A) 12%
B) 24%
C) 16%
D) cannot be determined with the information given.
Correct Answer:
Verified
Correct Answer:
Verified
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