A fiRm Has a Debt-To-Equity Ratio of 1

question 30

Multiple Choice

A firm has a debt-to-equity ratio of 1.20.If it had no debt, its cost of equity would be 15%.Its cost of debt is 10%.What is its cost of equity if there are no taxes or other imperfections?

• A)10%
• B)15%
• C)18%
• D)21%
• E)None of the above.

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Definitions:

Armed Conflicts

Instances of prolonged violence between national military forces, or between armed groups within a nation, often recognized by significant levels of aggression and organized combat.

Social Scientifically

Pertaining to the use of scientific methods and principles to analyze and understand social phenomena.

Social Dilemmas

Situations in which individual interests are in conflict with collective interests, leading to challenges in decision-making.

Resource Management

The efficient and effective deployment and allocation of an organization's resources when and where they are needed.