A firm has a weighted average cost of capital of 11.68 percent and a cost of equity of 15.5 percent.The debt-equity ratio is 0.65.There are no taxes.What is the firm's cost of debt?
A) 5.80 percent
B) 6.27 percent
C) 6.44 percent
D) 7.23 percent
E) 7.81 percent
Correct Answer:
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