Ta II: Multiple chat 1. Rosie's has a cost of equity or 13.76 percent and a pretax cost of debt of 8.5 percent. The detit-equity ratio 1.60 and the tax rate 1.21 percent. What is Rosita's unlevered cost of capital? 11.83 percent 12.07 percent 13.97 percent d. 14.08 percent 14.60 percent 2. Breckinridger Corp, has a debt-equity ratio of 85. The company is considering a new plant that will cost $117 million to build. When the company issues new equity, it incurs a flotation cost of 8.7 percent. The flotation cost on new debt is 4.2 percent. What is the initial cost of the plant if the company raises all equity externally? $125,311,179 b. $121,338,678 c. $119,302,210 d. $121.707,014 c. $117.989,314 2. 3. Wentworth's Five and Dime Store has a cost of equity of 12.6 percent. The company has an aftertax cost of debt of 4.5 percent, and the tax rate is 39 percent. If the company's debt-equity ratio is .86, what is the weighted average cost of capital? a. 6.95% b. 7.59% 8.04% d. 7.30% e. 8.85% c. 4. The Dance Studio is currently an all-equity firm that has 22,000 shares of stock outstanding with a market price of $27 a share. The current cost of equity is 12 percent and the tax rate is 23 percent. The firm is considering adding $225,000 of debt with a coupon rate of 6.25 percent to its capital structure. The debt will sell at par. What will be the levered value of the equity? a. $325,500 b. $420,750 c. $521,250 d. $472,750 e. $594,000 5. Aspen's Distributors has a levered cost of equity of 13.84 percent and an unlevered cost of capital of 12.5 percent. The company has $5,000 in debt that is selling at par. The levered value of the firm is $14,600 and the tax rate is 25 percent. What is the pretax cost of debt? 3