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W.V. Trees has a debt-equity ratio of .64, a WACC of 10.8 percent, a pretax cost of debt of 7.9 percent, and a tax rate

W.V. Trees has a debt-equity ratio of .64, a WACC of 10.8 percent, a pretax cost of debt of 7.9 percent, and a tax rate of 24 percent. What is the unlevered cost of equity capital?

A)

13.45 percent

B)

12.97 percent

C)

13.13 percent

D)

13.08 percent

E)

11.92 percent

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