Cintas Corporation is an all equity firm and has a cost of capital of 7.8 percent. The
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Cintas Corporation is an all equity firm and has a cost of capital of 7.8 percent. The firm is considering switching to a debt-equity ratio of 2.20 with a pretax cost of debt of 5.9 percent. What will the firm's cost of equity be if the firm makes the switch? The tax rate is 25%.
9.75%
10.06%
10.38%
10.72%
11.10%
Related Book For
Corporate Finance Core Principles and Applications
ISBN: 978-0077905200
3rd edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford
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