PLange Inc

question 87

Multiple Choice

P.Lange Inc.hired your consulting firm to help the company estimate the cost of equity.The yield on Lange's bonds is 7.25%,and your firm's economists believe that the cost of equity can be estimated using a risk premium of 3.50% over a firm's own cost of debt.What is an estimate of Lange's cost of equity from retained earnings?

• A)10.75%
• B)11.18%
• C)11.63%
• D)12.09%

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Definitions:

Inhaled Dirt

Microscopic particles from the environment that are drawn into the respiratory system during breathing.

Bacteria

Microorganisms that are single-celled and can exist either as independent organisms or as parasites.

Epiglottis

A flap of cartilage located at the opening of the larynx, which closes during swallowing to prevent food and liquid from entering the airway.

Pharynx

A part of the throat situated behind the mouth and nasal cavity, crucial for both the respiratory and digestive systems.