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Question 11 (1 point) Live Firm AAA has no debt and a cost of equity capital of 12% per year. Firm 888 equivalent to firm
Question 11 (1 point) Live Firm AAA has no debt and a cost of equity capital of 12% per year. Firm 888 equivalent to firm AAA in all ways except that firm B88 has debt. Firm BBB's debt to equity ratio is 0.5 and the interest rate that firm BBB pays on its debt is 4% per year. Both firms are subject to a 30% tax rate. What is the annual cost of equity capital for firm BB8? Round all intermediate calculations to 6 decimal points. Your final answer should be within 0.05% of the correct answer choice. 16.20% 14.80% 17.60% 16.00%
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