Abc inc has a de ratio of 12 the firm has a cost of equity, Financial Management

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Abc inc has a de ratio of 12 the firm has a cost of equity

ABC, Inc. has a D/E ratio of 1.2. The firm has a cost of equity of 12% and a cost of debt of 8%. What will the cost of equity be if the target capital structure becomes 67% debt and 33% equity? The cost of debt does not change. Ignore taxes. Choose one of the following answers.

A.10.56%

B. 11.12%

C. 13.51%

D. 13.64%

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Financial Management: Abc inc has a de ratio of 12 the firm has a cost of equity

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Financial Management: Abc inc has a de ratio of 12 the firm has a cost of equity

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