Question 16.S-TP.2: M&M Proposition II (no taxes) The Habitat Corporation ha...

Fundamentals of Corporate Finance

M&M Proposition II (no taxes) The Habitat Corporation has a WACC of 16 percent. Its cost of debt is 13 percent. If Habitat’s debt-equity ratio is 2, what is its cost of equity capital? Ignore taxes in your answer.

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