Question
1.My firm has a current beta of 1.5 and is all-equity financed. Later this year, the firm plans its first debt issuance and will become
1.My firm has a current beta of 1.5 and is all-equity financed. Later this year, the firm plans its first debt issuance and will become 25% debt and 75% equity. What is the appropriate cost of equity for my firm, assuming CAPM holds?
a.13.5%
b.12.9%
c.11.2%
d.9.9%
e. 9.6%
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Practical Financial Management
Authors: William R. Lasher
8th edition
1305637542, 978-1305887237, 1305887239, 978-1305637542
