Calculate the cost of capital for an all-equity firm with equity of $12,500 and expected earnings of $1,900.Multiple choice question.16.5%6.6%14.4%15.2%

Question

Calculate the cost of capital for an all-equity firm with equity of $12,500 and expected earnings of $1,900.Multiple choice question.16.5%6.6%14.4%15.2%
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Solution 1

The cost of capital for an all-equity firm is calculated by dividing the expected earnings by the total equity and then multiplying by 100 to get a percentage.

Here's the step-by-step calculation:

  1. Divide the expected earnings ($1,900) by the total equity ($12,500). The result is 0.152 or 15.2% Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study prob
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solv

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