Use the Information for the Question(s)below

question 98

Multiple Choice

Use the information for the question(s) below.
Aardvark Industries is considering a project that will generate the following free cash flows: You are also provided with the following market value balance sheet and information regarding Aardvark's cost of capital:
-Aardvark's unlevered cost of equity is closest to:

• A)10.0%.
• B)10.4%.
• C)9.5%.
• D)9.0%.

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Definitions:

Selling Price

The amount for which something is sold, determined by factors such as cost, demand, and competition.

Cost

The amount of money required to produce, purchase, or maintain a product or service.

Markup Percent

The surcharge applied to the acquisition cost of products for covering overhead and making a profit.

Selling Price

The final amount of money charged for a product or service, or the amount the consumer is willing to pay.