Question
Apache Corporation is currently a levered firm with a debt-equity ratio of 0.35 and a pretax cost of debt of 7.4%. The firm has a
Apache Corporation is currently a levered firm with a debt-equity ratio of 0.35 and a pretax cost of debt of 7.4%. The firm has a cost of equity of 11.59%. Apache is considering switching to an all equity firm. What will the firm's cost of equity be if it makes the switch? Ignore taxes.
| 10.26% | ||
| 11.87% | ||
| 9.72% | ||
| 10.85% | ||
| 10.50% |
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Lectures On Corporate Finance
Authors: Peter L Bossaerts, Bernt Arne Odegaard
2nd Edition
9812568999, 978-9812568991
