What Is the Expected Rate of Return to Equityholders If

question 73

Multiple Choice

What is the expected rate of return to equityholders if the firm has a tax rate of 35%, an interest rate on debt of 10%, a WACC of 15%, and a debt-asset ratio of 60%?

• A) 12.50%
• B) 21.25%
• C) 22.50%
• D)27.75%

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