Green Roof Foods currently has a debt-to-equity ratio of 0.53,its cost of equity is 14.2 percent,and its pretax cost of debt is 6.8 percent.The tax rate is 35 percent,and the risk-free rate is 3.1 percent.The firm's preferred capital structure consists of 35 percent debt.What discount rate should be assigned to a new project the firm is considering if the project is equally as risky as the overall firm and will be financed solely with equity?
A) 10.03%
B) 9) 76%
C) 11.07%
D) 10.78%
E) 10.26%
Correct Answer:
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