Bigelow,Inc

question 67

Multiple Choice

Bigelow,Inc. has a cost of equity of 13.56% and a pre-tax cost of debt of 7%. The required return on the assets is 11%. What is the firm's debt-equity ratio based on MM Proposition II with no taxes?

• A) .60
• B) .64
• C) .72
• D) .75
• E) .80

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Definitions:

Deregulation

The decrease or removal of governmental control in a specific sector, typically implemented to enhance competitive conditions within that sector.

Industrial Policy

Government measures aimed at improving the competitive stance and capabilities of domestic industries.

Extensive Experiments

A thorough or wide-ranging series of tests or investigations conducted to explore a hypothesis or understand a phenomenon better.

Social Regulation

Policies designed to protect Public welfare, including health, safety, and the environment.