A ﬁrm has a debt-to-equity ratio of 1.Its cost of equity is 16%, and its cost of debt is 8%.If the corporate tax rate is 25%, what would its cost of equity be if the debt-to-equity ratio were 0?
A)11.11%
B)12.57%
C)13.33%
D)16.00%
E)None of the above.

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The Answer 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 the corporate tax rate is 25%, what would its cost of equity be if the debt-to-equity ratio were 0?
A)11.11%
B)12.57%
C)13.33%
D)16.00%
E)None of the above.

A ﬁRm Has a Debt-To-Equity Ratio of 1