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Hi there, I need help with this question. Thanks very much. A company has an outstanding debt with a face value of $6,500, which has
Hi there, I need help with this question. Thanks very much.
A company has an outstanding debt with a face value of $6,500, which has annual coupon rate of 8%. The market value of this debt is the same as its face value. Company's expected EBIT is $1,400, its unlevered cost of capital is 14% and its tax rate is 35%.
What is the cost of equity for the company?
MC OPTIONS:
A. 23.60%
B. 18.57%
C. 25.14%
D. 17.90%
E. 22.41%
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