Presley Cleaners Has an All-Equity Capital Structure with an Equity

question 58

Multiple Choice

Presley Cleaners has an all-equity capital structure with an equity value of $64,100.The expected earnings are $8,900 based on estimated sales of $60,000.The firm pays no taxes.What is the cost of capital?

• A)13.88%
• B)12.08%
• C)14.83%
• D)14.34%
• E)12.37%

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