Jacque Ewing Drilling, Inc

question 55

Multiple Choice

Jacque Ewing Drilling, Inc. has a beta of 1.3.. If the risk-free rate of return is 8 percent and the expected return on the market is 12 percent, then what is the firm's after-tax cost of equity capital if the firm's marginal tax rate is 40 percent?

• A) 7.92%
• B) 13.20%
• C) 15.57%
• D) 23.60%

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Definitions:

United States

A country in North America consisting of 50 states, a federal district, and several territories.

Gray Matter

A component of the central nervous system consisting of neuronal cell bodies, neuropil (dendrites and axons), glial cells, and capillaries, which is critical for processing information in the brain.

Cognitive Functions

The intellectual processes that include thinking, reasoning, problem-solving, perception, and memory.

Indifferent Gonad

The embryonic precursor to the sex glands, which develops into either ovaries or testes depending on genetic and hormonal influences.