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A firm uses only debt and equity in its capital structure. The firm's weight of debt is 75 percent. The firm could issue new bonds

A firm uses only debt and equity in its capital structure. The firm's weight of debt is 75 percent. The firm could issue new bonds at a yield to maturity of 12 percent and the firm has a tax rate of 21 percent. If the firm's WACC is 13 percent, what is the firm's cost of equity?

Multiple Choice

  • 36.00 percent

  • 23.56 percent

  • 38.29 percent

  • 4.00 percent

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