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A Firm Has a Debt-Equity Ratio of 0

Question 43

Multiple Choice

A firm has a debt-equity ratio of 0.45,an unlevered WACC of 12.68 percent,and a pretax cost of debt of 6.8 percent.What is the levered cost of equity if there are no taxes or other imperfections?


A) 13.68%
B) 15.58%
C) 15.33%
D) 13.72%
E) 14.67%

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