What Is the Expected Return on Equity for a Firm

question 41

Multiple Choice

What is the expected return on equity for a firm with a 14% expected return on assets that pays 9% on its debt,which totals 30% of assets?

• A) 16.14%
• B) 17.00%
• C) 19.00%
• D) 25.67%

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Definitions:

Cu

The chemical symbol for copper, a ductile metal with very high thermal and electrical conductivity.

Ag

The chemical symbol for silver, a precious metal with high thermal and electrical conductivity.

Au

The chemical symbol for gold, a precious metal with high conductivity, resistance to corrosion, and extensive use in electronics, jewelry, and as a monetary standard.

Fractures

Breaks or cracks in rock which can occur naturally through geological processes or artificially through human activity.