What Is the Proportion of Debt Financing for a Firm

question 94

Multiple Choice

What is the proportion of debt financing for a firm that expects a 24% return on equity, a 16% return on assets, and a 12% return on debt? Ignore taxes.

• A)54.0%
• B)60.0%
• C)66.7%
• D)75.0% .24 = .16 +

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Definitions:

Erectile Tissue

Specialized tissue that can become erect when filled with blood, found in the penis, clitoris, and nipples.

Homologous

Relating to or derived from a similar origin, especially referring to structures that have the same evolutionary background but may serve different functions.

Cul-de-sac

A blind alley or dead-end street, but in anatomy, it refers to a sac- or pouch-like cavity or space that is closed at one end.

Puncture

The act of making a small hole in something, often for medical reasons such as to draw blood or administer medication.