Santana Enterprises Has $7,000,000 in Debt and $18,000,000 in Total

question 63

Multiple Choice

Santana Enterprises has $7,000,000 in debt and $18,000,000 in total assets.If the debt carries an interest rate of 9%,and the stockholders are demanding a 13% rate of return,Santana's cost of capital is:

• A)11.0%
• B)11.4%
• C)11.8%
• D)13.0%