The unlevered cost of capital is:
A) the cost of capital for a firm with no equity in its capital structure.
B) the cost of capital for a firm with no debt in its capital structure.
C) the interest tax shield times pretax net income.
D) the cost of preferred stock for a firm with equal parts debt and common stock in its capital structure.
E) equal to the profit margin for a firm with some debt in its capital structurE.

Question

Quizplus · Accepted Answer

The unlevered cost of capital refers to the cost of capital for a firm with no debt in its capital structure. It represents the minimum return required by investors for investing in a company's assets without considering the effects of debt financing.

The Unlevered Cost of Capital Is