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Company A and B are identical in all respects except for capital structure. Company A is all equity financed and pays dividends of 200,000 per

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Company A and B are identical in all respects except for capital structure. Company A is all equity financed and pays dividends of 200,000 per year to its shareholders in perpetuity. Company A has a total value of 2,000,000. Company B has a mixed capital structure consisting of debt and equity. Assuming capital markets are perfect in all respects, what is the overall cost of capital of Company B? O 20% O 2596 O 1596 1096 onse Company A is all equity financed and has a cost of equity of 20%. Company B is similar to Company A in all respects except for capital structure Company B is financed with 200,000 el equiry and 20,000 of dede Assuming capital markets are perfect, except for the existence of taxes at a rate of 30%, what is the overall cost of capita in company to O 20% 15% 14% 17%

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