Weston Mines Has a Cost of Equity of 14

question 91

Multiple Choice

Weston Mines has a cost of equity of 14.9 percent, a pretax cost of debt of 7.3 percent, and a return on assets of 12.6 percent.Ignore taxes.What is the debt-equity ratio?

• A).52
• B).84
• C).43
• D).77
• E).56

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Definitions:

Adjusting Entry

A journal entry made in accounting records at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.

Year 1

Refers to the first year of operation for a business or the first year of a specific reporting period.

Contra-asset

A contra-asset account is a type of asset account where its balance is a negative figure that offsets the balance of its corresponding asset account.

Liability

A financial obligation or debt owed by a company to another entity, which is expected to be settled through the transfer of assets or services.