If Galt's debt cost of capital is 6%,then Galt's equity cost of capital is closest to:
A)11.2%
B)12.0%
C)14.8%
D)15.2%

Name: If Galt's debt cost of capital is 6%,then Galt's equity cost of capital is closest to: A)11.2% B)12.0% C)14.8% D)15.2%
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Quizplus · Accepted Answer

D)Using APV V^L = V^U + T_cD = 11ea7cce_3cb6_ee33_928c_0b925c909ed7_TB1626_11 + (40%)$80 million = $232 million r_e = r_u + 11ea7cce_3cb7_1544_928c_af5fa56a07db_TB1626_11 (r_u - r_d)= 12% + 11ea7cce_3cb7_1545_928c_9591c2a1dc68_TB1626_11 (12% - 6%)= 15.157895%

If Galt's Debt Cost of Capital Is 6%,then Galt's Equity