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Question text Apple Enterprises is a publicly traded company. It currently has 10 million shares trading at $12/share and $150 million in book value of
Question text
Apple Enterprises is a publicly traded company. It currently has 10 million shares trading at $12/share and $150 million in book value of equity. The firm also has book value of debt of $ 75 million and market value of debt of $ 80 million. The cost of equity for the company is 9%, the after tax cost of debt is 4% and the marginal tax rate is 40%. What is the cost of capital?
Select one:
a. 6.6%.
b. 7.4%
c. 7.0%
d. 6.36%
e. 7.5%
f. 7.7%
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