Debbie's Cookies Has a Return on Assets of 12

question 69

Multiple Choice

Debbie's Cookies has a return on assets of 12.6 percent and a cost of equity of 14.8 percent.What is the pretax cost of debt if the debt-equity ratio is .38? Ignore taxes.

• A)5.87 percent
• B)95.29 percent
• C)9.04 percent
• D)7.31 percent
• E)6.81 percent

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Definitions:

Farm Output

The total quantity of agricultural products produced by a farm.

Parity Ratio

A term not defined in standard economic texts, potentially referring to comparative measures of commodities, incomes, or other economic indicators, effectively requiring further context for accurate explanation.

Farm Subsidies

Financial support and assistance provided by the government to farmers and agribusinesses to supplement their income and manage the supply of agricultural commodities.

American Institution

Organizations, principles, or traditions that are foundational to the society and culture of the United States.