13. Assume the following information for Eli Lilly Corporation: Previous Close 142.43 Total Assets 39.286 B Open 141.03 Revenue 22.320 B 52 Week Range 111.00-170.75 Interest-Bearing Debt 15.317 B Volume 2,144,822 Net Income 8.318 B Avg. Volume 5,296,915 Book Value of Equity 2.607 B Market Value of Equity 136.2 B Income tax rate 21% Market Equity Beta 0.60 Average pretax borrowing rate 3.25% PE Ratio (TTM) 23.09 EPS 5.70 If Eli Lilly increases its market value of debt to market value of equity to 25 percent, holding all else constant, what would its new cost of capital be? Assume a 6 percent market risk premium and 3 percent risk free rate. a. 5.02 percent. b. 6.31 percent. c. 6.67 percent. d. 6.96 percent. e. None of the above.

13. Assume the following information for Eli Lilly Corporation: Previous Close 142.43 Total Assets 39.256 B 14103 Reven 52 Werk Rante 111.00-190.9 Interest Beaning Debt 15:317B Volume 2.144,832 Net Income 8.3IS B Awe 5,296,915 Bok Value of Equity Market value of Equity 1362B Income tax rate Mike Equity Beta 0.60 Average pretax borrowing rate 3.2596 PER TIM 23.09 EPS 5.70 If Eli Lilly increases its market value of debt to market value of equity to 25 percent, holding all else constant, what would its new cost of capital be? Assume a 6 percent market risk premium and 3 percent risk free rate 25.02 percent 6.631 percent 667 percent d696 percent None of the above