Hey Guys!, Inc

question 59

Multiple Choice

Hey Guys!, Inc.has debt with both a face and a market value of $3,000.This debt has a coupon rate of 7% and pays interest annually.The expected earnings before interest and taxes is $1,200, the tax rate is 34%, and the unlevered cost of capital is 12%.What is the firm's cost of equity?

• A)13.25%
• B)13.89%
• C)13.92%
• D)14.14%
• E)14.25%

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Definitions:

Random Number

A number generated in such a way as to exhibit no predictable pattern or order, often used in computing to simulate chance or create variability in data processing.

Isalnum

A function in C that checks if a given character is an alphanumeric character (either a letter or a number).

Non-0 Number

A numeric value different from zero, indicating either a positive or negative value but not the absence of a quantity.

ASCII String

An ASCII String is a sequence of characters encoded using the ASCII standard, representing text in computers and other devices.