Your fiRm Has a Pre-Tax Cost of Debt of 7

question 101

Multiple Choice

Your firm has a pre-tax cost of debt of 7% and an unlevered cost of capital of 13%. Your tax rate is 35% and your cost of equity is 15.26%. What is your debt-equity ratio?

• A) .43
• B) .49
• C) .51
• D) .54
• E) .58

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Definitions:

Presenteeism

The practice of coming to work despite illness, injury, or other distress, often resulting in decreased productivity.

Common Health Problem

A health issue or condition that is frequently found within the general population, such as the flu or hypertension.

Alcoholism

A chronic disease characterized by uncontrolled drinking and preoccupation with alcohol, leading to physical and psychological dependence.

Workaholism

Workaholism is characterized by an uncontrollable need to work incessantly, often at the expense of personal health and social relationships.