Question: Please provide solution, also 1. (Capital structure) Suppose the weighted average cost of capital of Gadget Company is 10%. If Gadget has a capital structure

Please provide solution, also 1. (Capital structure) Suppose the weighted average

Please provide solution, also

1. (Capital structure) Suppose the weighted average cost of capital of Gadget Company is 10%. If Gadget has a capital structure of 50% debt and 50% equity, a before-tax cost of debt of 5%, and a marginal tax rate of 20%, then its cost of equity capital is closest to: (a) 12% (b) 14% (c) 16%

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