Rosita's Has a Cost of Equity of 13

question 41

Multiple Choice

Rosita's has a cost of equity of 13.76 percent and a pretax cost of debt of 8.5 percent.The debt-equity ratio is .60 and the tax rate is 21 percent.What is Rosita's unlevered cost of capital?

• A)11.83 percent
• B)12.07 percent
• C)13.97 percent
• D)14.08 percent
• E)14.60 percent

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Definitions:

Pretesting

A method used to test or evaluate materials or interventions before their final application or implementation.

Population

The entire group of individuals or instances about whom the study is focused, from which a sample may be drawn for analysis.

Census

A comprehensive collection and analysis of data about every member of a population at a specific point in time.

Sample

A subset of a population selected for measurement, observation, or questioning to provide statistical information about the population.