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The finance manager of NN Co. estimated the following: Unlevered beta (BUL) 1.75 Debt to equity ratio (D/E) 40.00 % Tax rate (t) 30% Risk

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The finance manager of NN Co. estimated the following: Unlevered beta (BUL) 1.75 Debt to equity ratio (D/E) 40.00 % Tax rate (t) 30% Risk free rate 3% Market risk premium 5% By how much would the capital structure shift change the Co's cost of equity? a. Less than 1% b. Between 1% and 1.10% c. between 1.15% and 1.25% d. between 2% and 3%

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