Question: 7. A firm has zero debt in its capital structure. Its overall cost of capital is 11%. The firm is considering a new capital structure

7. A firm has zero debt in its capital structure. Its

7. A firm has zero debt in its capital structure. Its overall cost of capital is 11%. The firm is considering a new capital structure with 40% debt. The interest rate on the debt would be 8%. Assuming there are no taxes or other imperfections, its cost of equity capital with the new capital structure would be (2 Points) 9% 12% 13% 14%

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