Distributors has a levered cost of equity

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Aspen's Distributors has a levered cost of equity of 13.84 percent and an unlevered cost of capital of 12.5 percent. The company has $5,000 in debt that is selling at par. The levered value of the firm is $14,600 and the tax rate is 34 percent. What is the pretax cost of debt?

7.92%

8.60%

8.16%

8.84%

9.00%

Reference no: EM131590691

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