Luther Industries has 25 million shares outstanding trading at $18 per share. In addition, Luther has $150 million in outstanding debt. Suppose Luther's equity cost of capital is 13%, its debt cost of capital is 7%, and the corporate tax rate is 21%.
29) Luther's unlevered cost of capital is closest to:
A) 7.0%.
B) 9.8%.
C) 10.8%.
D) 11.5%.
30) Luther's weighted average cost of capital is closest to:
A) 9.8%.
B) 10.8%.
C) 11.1%.
D) 13.0%.