Question: Bulldog Electronics Corporation finances its operations with P75 million in stock with a required return of 12 percent and P45 million in bonds with

Bulldog Electronics Corporation finances its operations with P75 million in stock with

Bulldog Electronics Corporation finances its operations with P75 million in stock with a required return of 12 percent and P45 million in bonds with a required return of 8 percent. Suppose the firm issues P15 million in additional bonds at 8 percent, using the proceeds to retire P15 million worth of equity. If the WACC remains the same, what will be the firm's new cost of equity? (Assume zero taxes and perfect capital markets) Group of answer choices 13.00% 14.00% 12.50% 14.40%

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