Given the all-equity cost of capital,the cost of levered equity can be computed as:
A) RS = (B/S) (R0) + (1 − tC) B.
B) RS = R0 + (B/S) (1 − tC) (R0 − RB) .
C) RS = R0 + (1 − tC) B.
D) R0 = Rs + (B/S) (1 − tC) (R0 − RB) .
E) R0 = Rs + (1 − tC) B.
Correct Answer:
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