14- A firm has a debt-to-equity ratio of 1.00. Its cost of equity is 12%, and its cost of debt is 6%. If there are no taxes or other imperfections (M&M 1958), what would be its cost of equity if the debt-to-equity ratio is 0? That is, what is Kcs_u?

Assuming a cost of debt of 6%, Kcs_u = 9%, and using the M&M 1958 model, what is the market value of equity if the market value of debt is currently $1,000,000 and the cost of equity (levered) is 10.5%?

Group of answer choices

less than $1.9M

between $2.1M and $2.3M

between $2.3M and $2.5M

greater than $2.5M

beween $1.9M and $2.1M