The BaPol Company Has a Cost of Equity of 14

question 18

Multiple Choice

The BaPol Company has a cost of equity of 14% and a weighted average cost of capital of 13.02%.What is the company's cost of debt,if BaPol Company maintains the debt-equity ratio of 0.44? Consider that there are no taxes.

• A)16.68%
• B)13.48%
• C)12.26%
• D)10.80%
• E)17.59%

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Definitions:

Closely Held Corporation

A business corporation that has a small group of shareholders, with shares that are not publicly traded on stock exchanges.

Unfairly Prejudicial

Actions or decisions that unjustly or unfairly harm the interests of a particular party, often seen in corporate or business contexts.

Sole Shareholder

An individual or entity that owns 100% of the shares of a company, holding complete control over the business.

Fiduciary Duty

An obligation to act in the best interest of another party, typically in matters of finance or trust management.