Taylor Inc. has a debt-to-equity ratio of 3. The companys WACC is 12% and its before-tax cost of debt is 8%. The corporate tax rate is 25%.

13. What is the companys cost of equity?

A) 30% B) 14% C) 42% D) 24% E) There is not enough information to answer.

14. Pretend that your answer to the previous question was 26%. What would be the companys unlevered cost of equity (RU)?

A) 19.56% B) 13.54% C) 12% D) 12.5% E) 21.71%