Question: QUESTION 22 1 points Save Answer HiFlyer Corporation does not currently have any debt. Its tax rate is 40% and its unlevered beta of 2.0

QUESTION 22 1 points Save Answer HiFlyer Corporation does not currently

QUESTION 22 1 points Save Answer HiFlyer Corporation does not currently have any debt. Its tax rate is 40% and its unlevered beta of 2.0 is estimated by examining comparable companies. The 10-year Treasury bond rate is 2% and the historical risk premium over the risk free rate is 5.5%. Next year, HiFlyer expects to borrow up to 75% of its equity value to fund future growth. What is the firm's cost of equity after it increases its leverage to 75% of equity? A. 21.25% OB. 18.1% O C. 16.8% OD. 12.95% E. 19.5%

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