Mountain Groves Has an Unlevered Cost of Capital of 13

question 44

Multiple Choice

Mountain Groves has an unlevered cost of capital of 13.2 percent, a cost of debt of 8.3 percent, and a tax rate of 21 percent. What is the target debt-equity ratio if the targeted cost of equity is 14.5 percent?

• A) .54
• B) .29
• C) .34
• D) .48
• E) .33

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Definitions:

Employee Referrals

A recruitment method where existing employees recommend potential candidates for positions within the organization.

Status Quo

The existing state or condition of affairs, often used to describe situations that remain unchanged.

Work Habits

Routine behaviors and practices that employees exhibit in the workplace, which can impact their performance and efficiency.

Workplace Diversity

Includes important human characteristics that influence employee values, their perceptions of self and others, behaviours, and interpretations of events.