A firm has a debt-to-equity ratio of 1. Its cost of equity is 16%, and its cost

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A firm has a debt-to-equity ratio of 1. Its cost of equity is 16%, and its cost of debt is 8%. If there are no taxes or other imperfections, what would be its cost of equity if the debt-to-equity ratio were 0.5?

10%

12%

14%

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Analysis for Financial Management

ISBN: 978-0078034688

10th edition

Authors: Robert C. Higgins

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Posted Date: Feb 13, 2024 05:56 AM

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A firm has a debt-to-equity ratio of 1. Its cost of equity is 16%, and its cost

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Analysis for Financial Management

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