unlevered cost of equity under Modigliani-Miller Model?
Chapter13: Capital Structure Concepts
Section: Chapter Questions
Problem 2P
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Q7
![The EBIT of the unlevered company is OMR 80,000; value of unlevered
company is OMR 480,000 and the corporate tax rate is 50%, then what is
unlevered cost of equity under Modigliani-Miller Model?
O a. 8.33%
b. 25%
C. 16.67%
d. 33.33%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbc6b848a-6b94-4f83-9909-e0be49b85998%2F81dd745c-1048-4f44-ab5f-52ff828514d0%2Fyg7bi3_processed.png&w=3840&q=75)
Transcribed Image Text:The EBIT of the unlevered company is OMR 80,000; value of unlevered
company is OMR 480,000 and the corporate tax rate is 50%, then what is
unlevered cost of equity under Modigliani-Miller Model?
O a. 8.33%
b. 25%
C. 16.67%
d. 33.33%
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