Problem:
Jemisen's firm has expected earnings before interest and taxes of $1,500. Its unlevered cost of capital is 15 percent and its tax rate is 35 percent. The firm has debt with both a book and a face value of $2,400. This debt has a 7 percent coupon and pays interest annually.
Required:
Question: What is the firm's weighted average cost of capital?
- 14.19 percent
- 13.28 percent
- 13.34 percent
- 13.51 percent
- 13.81 percent
Note: Please provide full description.