Rogue River Retail Inc.has a before-tax cost of debt of 8.00%,a cost of equity of 12.00%,a tax rate of 30.00% and no preferred stock outstanding.If the firm is made up of 50% debt and 50% equity,what is the firm's after-tax cost of borrowing?
A) 12.00%
B) 11.60%
C) 8.00%
D) 5.60%
Correct Answer:
Verified
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