WVTrees,Inc

question 83

Multiple Choice

W.V.Trees,Inc.has a debt-equity ratio of 1.4.Its WACC is 10 percent,and its cost of debt is 9 percent.The corporate tax rate is 33 percent.What is the firm's unlevered cost of equity capital?

• A)12.38 percent
• B)12.79 percent
• C)13.68 percent
• D)14.10 percent
• E)14.45 percent

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Definitions:

Long-Term Plans

Plans that typically look three or more years into the future.

Personal Power

The influence or authority an individual has over others, derived from skills, knowledge, or personal attributes, rather than formal positions.

Reward Power

The power to influence others through the offering of rewards, benefits, or incentives for certain behaviors or achievements.

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