Bigelow,Inc

question 60

Multiple Choice

Bigelow,Inc.has a cost of equity of 13.00% 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).50
• B).64
• C).72
• D).75
• E).80

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Definitions:

Dependent Stakeholders

Individuals or groups who rely on a business's success or failure for their own benefit but don't have direct control over its operations.

Urgency and Legitimacy

The critical need for action combined with the recognized authenticity or credibility that prompts such action.

Producer Unit

A term used in economics and sociology referring to a group or entity involved in producing goods or services, often within the context of a family or small-scale enterprise.

Consumer Unit

An economic term representing individuals or groups of people who live together and make joint or shared decisions on consumption of goods and services.