Jacque Ewing Drilling, Inc

question 79

Multiple Choice

Jacque Ewing Drilling, Inc. has a beta of 1.3 and is trying to calculate its cost of equity capital. 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%

---

Definitions:

REM Sleep

A stage of sleep characterized by rapid eye movements, more vivid dreams, and increased brain activity.

Premature

Occurring before the expected time or before the completion of the normal gestation period, often used to describe early birth.

Full-Term

Referring to a pregnancy that has reached between 39 and 40 weeks of gestation, indicating that the baby is fully developed and ready for birth.

Very Low Birth Weight

A term used to describe babies who are born weighing less than 1500 grams (3 pounds, 4 ounces).