A Firm Has a Debt-To-Equity Ratio of

question 50

Multiple Choice

A firm has a debt-to-equity ratio of .5. Its cost of equity is 22%,and its cost of debt is 16%. If the corporate tax rate is .40,what would the cost of equity be if the debt-to-equity ratio were 0?

• A) 14.00%
• B) 20.61%
• C) 21.07%
• D) 22.00%
• E) None of these.

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Definitions:

Heights

Measurements of how tall individuals or objects are from base to top.

Statistics

The art and science of collecting, analyzing, presenting, and interpreting data.

Largest Data Values

Refers to the highest or maximum values in a given dataset.

Smallest Data Values

The minimum value within a set of numbers, indicating the lowest point in a data set.