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Omega Corp. has a market capitalization of $250 million, and $100 million in outstanding debt. The firms cost of equity and cost of debt are
Omega Corp. has a market capitalization of $250 million, and $100 million in outstanding debt. The firms cost of equity and cost of debt are 15% and 5%, respectively. The corporate tax rate is 35%. As a project manager, you can identify Omega Corp as a comparable firm for the project you are evaluating. If the project is all-equity financed, the projects cost of capital is closest to:
A. | 16.11% | |
B. | 11.64% | |
C. | 12.14% | |
D. | 15.00% |
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