A Firm Has a Debt-To-Equity Ratio of 1

question 18

Multiple Choice

A firm has a debt-to-equity ratio of 1.30.If it had no debt,its cost of equity would be 15%.Its cost of debt is 10%.What is its cost of equity if there are no taxes or other imperfections?

• A)10.0%
• B)15.5%
• C)18.4%
• D)21.5%
• E)None of the above.

---

Definitions:

Work

Any productive activity through which an individual, group, or organization aims to achieve a goal and earn compensation.

Sexual Harassment

Inappropriate sexual proposals, demands for sexual privileges, and various types of sexual harassment through words or actions.

Co-Workers

Individuals who work together in the same organization or on the same team, often contributing to common goals.

RCMP

The Royal Canadian Mounted Police, the federal and national police service of Canada, responsible for enforcing law and order throughout the country.