The Tip-Top Paving Co. has a beta of 1.11,a cost of debt of 11% and a debt to value ratio of .6. The current risk free rate is 9% and the market rate of return is 16.18%. What is the company's cost of equity capital?
A) 7.97%
B) 8.96%
C) 16.97%
D) 17.96%
E) 26.96%
Correct Answer:
Verified
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