Assume a Firm Is Financed with $2,000 Debt That Has

question 31

Multiple Choice

Assume a firm is financed with $2,000 debt that has a market beta of 0.1 and $3,000 equity. The risk-free rate is 3%, the equity premium is 5%, and the firm's overall cost of capital is 10%.
-Refer to the information above. What is the expected return on the firm's equity?

• A)8.0%
• B)14.3%
• C)8.6%
• D)15.0%

Determine the initial deposit amount required to reach a future value under simple interest.

Calculate the simple interest rate given the initial and maturity values of an investment.

Determine the interest earned on an investment over a specific period.

Calculate the principal amount of a loan or investment given the interest rate and time period.

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Definitions:

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