Explore BrainMass

Explore BrainMass

    Cost of equity

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    A firm has a debt-to-equity ratio of 1.20. If it had no debt, its cost of equity would be 15%. Its cost of debt is 10%. What is its cost of equity if there are no taxes or other imperfections?

    a. 10%
    b. 15%
    c. 18%
    d. 21%
    e. none of the above

    © BrainMass Inc. brainmass.com March 4, 2021, 9:52 pm ad1c9bdddf
    https://brainmass.com/business/management-accounting/cost-of-equity-278532

    Solution Preview

    We have to calculate the levered cost of equity given the unlevered cost of ...

    Solution Summary

    The solution explains how to calculate the cost of equity

    $2.49

    ADVERTISEMENT