D. Both A and B
If you have good credit you will be able to qualify for cards with low APRs and if you have bad credit you will be charged higher rates
Answer
The answer and procedures of the exercise are attached in the following archives.
Step-by-step explanation:
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
Answer:
The Pearson's cost of common equity is 16.00%
Explanation:
For computing the cost of common equity, following formula should be used which is shown below:
WACC = (Equity portion × total cost of equity) + (debt portion × total cost of debt) × (1 - tax rate)
11.50% = (0.55 × total cost of equity) + (0.45 × 0.10) × (1 - 0.40)
11.50% = (0.55 × total cost of equity) + 0.045 × 0.60
11.50% = (0.55 × total cost of equity) + 0.027
11.50% - 2.70% = (0.55 × total cost of equity)
8.80% ÷ 0.55 = total cost of equity
So, total cost of equity = 16.00%
Hence, the Pearson's cost of common equity is 16.00%