What is the cost of equity for mulberry inc

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Reference no: EM132759228

Problem 1: Mulberry, Inc. has a weighted average cost of capital (ignoring taxes) of 20 percent. It can borrow at 10 percent. Mulberry has a target ½ debt/equity ratio. Using the M&M Proposition II, what's the cost of equity?

A. 29 percent

B. 25 percent

C. 31 percent

D. 15 percent

Problem 2: Flotation costs are the costs associated with

A. market inefficiencies.

B. reporting.

C. bankruptcy.

D. new stock or bond issues.

Reference no: EM132759228

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