Question: Royal Shell has a debt with both a face and a market value of $5,000. This debt has a coupon rate of 6% and pays

Royal Shell has a debt with both a face and a market value of $5,000. This debt has a coupon rate of 6% and pays interest annually. The expected perpetual earnings before interest and taxes are $2,000, the tax rate is 30%, and the unlevered cost of capital is 12%. What is the firm's cost of equity?

please show steps with formula

a. 14.57% b. 14.83% c. 15.08% d. 15.24%

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