Assume a Firm Is Financed with 30% Debt on Which

question 103

Multiple Choice

Assume a firm is financed with 30% debt on which it pays 9%. What is the expected return on equity if the expected return on assets is 14%?

• A) 16.14%
• B) 17.86%
• C) 14.92%
• D)15.50%

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Definitions:

Employer's Ability To Pay

An assessment of an employer's financial capability to meet salary demands and provide benefits to its employees.

Job Ranking

A method of evaluating jobs relative to each other within an organization based on their overall importance or complexity.

Precise Measure

A highly accurate and specific method of evaluation or quantification, allowing for little to no variation or error.

Labour Market Conditions

Refers to the current status of employment, unemployment, job creation, and wages in a particular region or economy.