Question: Question 14 3 points Save Answer Use the following information to answer questions 10-16. AAA Corporation and BBB Corporation are identical in every way except

Question 14 3 points Save Answer Use the following information to answer questions 10-16. AAA Corporation and BBB Corporation are identical in every way except their capital structures. AAA Corporation, an all-equity firm, has 25 million shares of stock outstanding, currently worth $55 per share. BBB Corporation uses leverage in its capital structure. The market value of BBB's debt is $400mil., and its cost of debt is 4.5 percent. Each firm is expected to have earnings before interest and tax of $165mil. in perpetuity. Assume that every investor can borrow at 4.5 percent per year. Corporate tax rate is 35%. Q14. What would be the AAA corporation's cost of capital, (Ro)? O 6.0 % O 8.57% O 5.47 % O 7.80 % O 7.08 %

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