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Apple Inc. is currently equity-financed only with a beta of 1.1. Its tax rate is 35%. Risk-free rate and market risk premium are both 7%.

Apple Inc. is currently equity-financed only with a beta of 1.1. Its tax rate is 35%. Risk-free rate and market risk premium are both 7%. Calculate the cost of equity if Apple Incs capital structure consists of 30% debt and 70% equity.

a. 0.157

b. 0.168

c. 0.184

d. 0.191

e. 0.233

f. No enough information

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