What Is the Proportion of Equity Financing for a Firm

question 60

Multiple Choice

What is the proportion of equity financing for a firm that expects a 15% return on equity, a 10% return on assets, and an 8% return on debt? Ignore taxes.

• A)25%
• B)29%
• C)75%
• D)71%

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Definitions:

Rent Control

Government-imposed restrictions on the amounts that landlords can charge their tenants, intended to keep housing affordable.

Housing Market

The supply and demand for residential properties, influenced by factors such as interest rates, economic conditions, and government policies.

Elastic

A term used to describe a situation in which the demand or supply for a good or service changes significantly when its price changes.

Price Ceiling

A legal maximum price that can be charged for a good or service, usually imposed by a government to prevent prices from becoming too high.