Use the Following Information to Answer the Question(s)below

question 29

Multiple Choice

Use the following information to answer the question(s) below.
Luther Industries has 25 million shares outstanding trading at $18 per share.In addition,Luther has $150 million in outstanding debt.Suppose Luther's equity cost of capital is 13%,its debt cost of capital is 7%,and the corporate tax rate is 21%.
-Luther's unlevered cost of capital is closest to:

• A)7.0%.
• B)9.8%.
• C)10.8%.
• D)11.5%.

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Definitions:

Situational Attributions

The process of explaining one's own behavior or the behavior of others by attributing it to external circumstances or situational factors.

Actor-observer Bias

A tendency to attribute one's own actions to external factors while attributing others' actions to their internal traits or dispositions.

Causal Dimensions

Attributes or aspects of a cause that affect individuals' perceptions and judgments about the cause, such as its controllability or stability.

Weiner's

refers to the attribution theory of motivation developed by Bernard Weiner, which explains how individuals attribute causes to successes and failures.