Cost of equity-debt-equity ratio


Problem:

Sun Sports has a unlevered cost of cpaital of 11%, a cost of debt of 7%, and a tax rate of 40%.

Required:

Question: What is the cost of equity if the debt-equity ratio is 0.50?

  • 2.40%
  • 7%
  • 11%
  • 12.20%
  • 13%

Note: Show all workings.

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Finance Basics: Cost of equity-debt-equity ratio
Reference No:- TGS0894078

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