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A. Butcher Timber Company hired your consulting firm to help them estimate the cost of equity. The yield on the firm's bonds is 8.75%, and

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A. Butcher Timber Company hired your consulting firm to help them estimate the cost of equity. The yield on the firm's bonds is 8.75%, and your firm's economists believe that the cost of equity can be estimated using a risk premium of 5.00% over a firm's own cost of debt. What is an estimate of the firm's cost of equity from retained earnings? a. 11.60% b. 12.75% c. 13.85% d. 14.17% e. 15.60%

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