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Omega Co. does not currently have any debt. Its tax rate is 35% and its unlevered beta is estimated to be 1.5. The treasury bond
Omega Co. does not currently have any debt. Its tax rate is 35% and its unlevered beta is estimated to be 1.5. The treasury bond rate is 6% and the historical risk premium over the risk-free rate is 5.5%. Omega expects to borrow up to 75% of its equity value to fund future growth. Estimate the firms cost of equity after it increases its leverage. Select one: a. 18.54% b. 22.85% c. 17.25% d. 24.20%
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