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A company has an after tax cost of debt of 7 and a 17 cost

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A firm's new bonds will have a 12% coupon. The current price of common shares is $40.00; the most recent dividend was $2.00. The firm's tax rate is 35%. The firm is expected to grow at 9% for the foreseeable future. What is their cost of equity (retained earnings)? Remember that D0 is not the same as D1.

Select one:

A. 14.00%

B. 14.45%

C. 9.00%

D. 5.45%

A company has an after tax cost of debt of 7% and a 17% cost of equity. From the capital section of their balance sheet below, calculate their weighted average cost of capital.

LT Debt 4500
Equity 7500

Select one:

A. 10.0%

B. 10.8%

C. 13.3%

D. 24.0%

Reference no: EM13479141

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