If a Firm Is Unlevered and Has a Cost of Equity

question 21

Multiple Choice

If a firm is unlevered and has a cost of equity capital 12% what would the cost of equity be if the firms became levered at 2:1?The expected cost of debt would be 8%.

• A) 14.67%.
• B) 16.0%.
• C) 20.0%.
• D) 14.0%.

---

Definitions:

Field Supervisors

Professionals who oversee and provide guidance to individuals during practical training or fieldwork in their specific area of expertise.

Proactive

Taking initiative by acting in anticipation of future problems, needs, or changes rather than reacting after they occur.

Confidentiality Issues

Challenges or dilemmas related to maintaining the privacy of information, especially in contexts like healthcare or counseling.

Field Placement Tasks

Specific duties or assignments carried out by a student in a practical, real-world setting as part of their educational curriculum.