Louisiana State University, Shreveport FIN FIN 701 Hi There, could you please help me explaining how to resolve this problems. thank you! Company Inc. has debt with both a face and a market value of
A firm has a debt-to-equity ratio of 1. Its cost of equity is 16%, and its cost of debt is 8%. If there are no taxes or other imperfections, what would be its cost of equity if the debt-to-equity ratio were 0?
a. 8% b. 10% c. 12% d. 14% e. 16%
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