The Market Value of Cable Company's Equity Is $60 Million

question 38

Multiple Choice

The market value of Cable Company's equity is $60 million and the market value of its debt is $40 million. If the required rate of return on the equity is 15 percent and that on its debt is 5 percent, calculate the company's cost of capital. (Assume no taxes.)

• A)15 percent
• B)10 percent
• C)11 percent
• D)9 percent

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Definitions:

Taxonomy

Branch of biology concerned with identifying, describing, and naming organisms.

Systemic Biology

An interdisciplinary field that focuses on the interactions and behavior of complex systems within biology, ranging from ecosystems to cellular networks.

Evolutionary Relatedness

The degree to which species share common ancestors and exhibit similarities in their genetic makeup and physical traits.

Adaptive Radiation

The evolutionary process where organisms diversify rapidly into a multitude of new forms, particularly when a change in the environment makes new resources available, creating new challenges or opening new environmental niches.