hard · Principles of Finance risk-return-portfolio
A firm with a 25% tax rate relevers an unlevered beta of 0.80 to a target D/E of 0.60.
If the risk-free rate is 4% and the market risk premium is 5%, what is the cost of equity?
- 10.4%
- 11.2%
- 9.8%
- 8.0%
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