Question
Aspen's Distributors has a levered cost of equity of 13.84 percent and an unlevered cost of capital of 12.5 percent. The company has $5,000 in
Aspen's Distributors has a levered cost of equity of 13.84 percent and an unlevered cost of capital of 12.5 percent. The company has $5,000 in debt that is selling at par. The levered value of the firm is $14,600 and the tax rate is 34 percent. What is the pretax cost of debt?
7.92%
8.60%
8.16%
8.84%
9.00%
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Probability For Risk Management
Authors: Matthew J. Hassett, Donald G. Stewart
2nd Edition
156698548X, 978-1566985482
