Glover Tools Has a Pre-Tax Cost of Debt of 9

question 170

Multiple Choice

Glover Tools has a pre-tax cost of debt of 9% and an unlevered cost of capital of 13.5%. The firm's tax rate is 34% and the cost of equity is 15%. What is the firm's debt-equity ratio?

• A) .42
• B) .48
• C) .51
• D) .58
• E) .64

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Definitions:

Cost Per Hire

A metric used to calculate the total expenses associated with recruiting and hiring a new employee.

Employee Referrals

A recruiting strategy where current employees recommend prospective candidates for job openings within the company, often incentivized through rewards.

Private Employment Agency

An organization that matches employers with job seekers for a fee.

Executive Search Firms

Companies specialized in recruiting executive-level personnel for other organizations, often for senior positions needing specific expertise.