JoBo's is a 100% equity financed firm with a tax rate of 34% and a WACC of 13%. The company can borrow money at a current rate of 8%. EBIT is $24,500 annually. What is the current cost of equity?
A) 8.58%
B) 10.72%
C) 12.67%
D) 13.00%
E) 13.33%
Correct Answer:
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