A Firm's Return on Assets Is 12 Percent and the Cost

question 54

Multiple Choice

A firm's return on assets is 12 percent and the cost of the firm's debt is 7 percent. Given a 0.7 debt-equity-ratio, what is the levered cost of equity? Assume that there are no taxes.

• A)7.0 percent
• B)12.0 percent
• C)13.6 percent
• D)15.5 percent

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Suggestions or proposals as to the best course of action, especially one put forward by someone with expertise or authority.

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Pertaining to factors, influences, or conditions that exist or originate outside of an organization or system.

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