A firm has zero debt in its capital structure and has an overall cost of capital of 10 percent. The firm is considering a new capital structure with 65 percent debt at an interest rate of 8 percent. Assuming there are no taxes or other imperfections, what would be the cost of equity with the new capital structure? A) 9 percent B) 12 percent C) 13 percent D) 14 percent E) 11 percent OA). O E) O B) O D)

A firm has zero debt in its capital structure and has an overall cost of capital of 10 percent. The firm is considering a new capital structure with 65 percent debt at an interest rate of 8 percent. Assuming there are no taxes or other imperfections, what would be the cost of equity with the new capital structure? A) 9 percent B) 12 percent C) 13 percent D) 14 percent E) 11 percent A) E) B) D) A firm has zero debt in its capital structure and has an overall cost of capital of 10 percent. The firm is considering a new capital structure with 65 percent debt at an interest rate of 8 percent. Assuming there are no taxes or other imperfections, what would be the cost of equity with the new capital structure? A) 9 percent B) 12 percent C) 13 percent D) 14 percent E) 11 percent A) E) B) D)