Kinston Enterprises has earnings before interest and tax (EBIT) per annum in perpetuity of $28,710. The tax rate is 30%. The firm is funded $50,000 of debt and $100,000 of equity. The cost of equity is 18% and the cost of debt is 6%.

QUESTION 12 Given the information above, what is the appropriate discount rate if net profit after tax (NPAT) is used to calculate the equity value of the firm?

	A.	19.14%
	B.	25.71%
	C.	18%
	D.	6%
	E.	None of the above