A Firm Has a Debt-Equity Ratio of

question 69

Multiple Choice

A firm has a debt-equity ratio of .55 with a cost of debt of 6.7 percent.If it had no debt,its cost of equity would be 14.5 percent.What is its levered cost of equity assuming there are no taxes or other imperfections?

• A)18.96 percent
• B)15.82 percent
• C)17.94 percent
• D)18.79 percent
• E)13.67 percent