Please provide answer the accounting question Winter's Toyland has a debt-equity ratio of 2.00. The cost of debtis 10 percent and the required return on assets is 19 percent. What isthe cost of equity if you ignore taxes? Write your answer as a percentrounded to two digits, but don't include the % sign (i.e. write 12.63,not 0.1263).

Step 1: Define Debt-Equity RatioThe ratio of total debt relative to total equity is called the…

Answered: Winter's Toyland has a debt-equity…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter6: Accounting For Financial Management

Section: Chapter Questions

Problem 3P

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Winter's Toyland has a debt-equity ratio of 2.00. The cost of debt is 10 percent and the required return on assets is 19 percent. What is the cost of equity if you ignore taxes? Write your answer as a percent rounded to two digits, but don't include the % sign (i.e. write 12.63, not 0.1263).