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. Your firm has debt worth $200,000, with a yield of 9 percent, and equity worth $300,000.It is growing at a 5 percent rate, and
. Your firm has debt worth $200,000, with a yield of 9 percent, and equity worth $300,000.It is growing at a 5 percent rate, and faces a 40 percent tax rate.A similar firm with no debt has a cost of equity of 12 percent.Under the MM extension with growth, what is its cost of equity?
a.9.36%
b.12.0%
c.12.8%
d.13.2%
e.14.0%
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