Freddie Frog has a beta of 1.2, a post-tax cost of debt of 8 per cent and
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Question:
Freddie Frog has a beta of 1.2, a post-tax cost of debt of 8 per cent and a debt-to-value ratio of 0.6. The current risk-free rate is 5 per cent and the market rate of return is 17 per cent.
What is the company's cost of equity capital?
11.60 per cent.
12.56 per cent.
17.00 per cent.
19.40 per cent.
20.40 per cent.
Expert Answer:
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