Question
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 30 percent. If the firm's WACC is 13 percent, what is the firm's cost of equity?
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38.29 percent
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36.00 percent
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26.80 percent
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4.00 percent
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Cost Accounting A Managerial Emphasis
Authors: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
15th edition
978-0133428704
