What would be the firms unlevered cost of equity

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Reference no: EM132033469

Tthe Nu-Car Company had a Return of Equity (Re) of 20.35 % and a Return on Debt (Rd) is 5.25% The company has an existing Debt/Equity Ratio in the amount of 95.00% The corporate tax rate is 38.00%

What would be the firm's Unlevered cost of Equity (Ru)?

Follow the M& M Proposition II Model. Re = Ru + (Ru - Rd)*(D/E)*(1 - Tc)

Reference no: EM132033469

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