Bigelow SpA Has a Cost of Equity of 13

question 27

Multiple Choice

Bigelow SpA has a cost of equity of 13.56% and a pre-tax cost of debt of 7%.The required return on the assets is 11%. What is the firm's debt-equity ratio based on MM Proposition II with no taxes?

• A).60
• B).64
• C).72
• D).75
• E).80

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Definitions:

Sore Muscles

Muscular pain or discomfort often following intense exercise or physical activity, typically due to overexertion or unfamiliar activity.

Muscle Cramps

Involuntary and often painful contractions of muscles, which can occur in various circumstances, such as exercise, dehydration, or mineral deficiencies.

Intramuscular Calf Veins

Veins located within the muscle tissue of the calf, involved in the circulation of blood back to the heart.

Venous Insufficiency

A condition where the flow of blood up the legs to the heart is inadequate, leading to blood pooling and vein enlargement, often in the legs.