13 . The flow - to- equity approach to capital budgeting is a three step process . A calculating the levered cash flow , the cost of equity capital for a levered firm , then adding the interest expense when the cash flows are discounted B . calculating the unlevered cash flow , the cost of equity capital for a levered firm , and then discounting the unilevered cash flow C calculating the levered cash flow after interest expense and taxes , the cost of equity capital to a levered firm and then discounting the levered cash flows by the cost of equity capital D . calculating the levered cash flow after interest expense and taxes , the cost of equity capital for levered firm and then discounting the levered cash flows at the risk free rate rate E . None of the above