The Spartan Co

question 79

Multiple Choice

The Spartan Co.has an unlevered cost of capital of 11%,a cost of debt of 8%,and a tax rate of 35%.What is the target debt-equity ratio if the targeted cost of equity is 12.5%?

• A).44
• B).49
• C).51
• D).66
• E).77

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Definitions:

Probability

The estimation of how likely an event is to take place, quantified by a number ranging from 0 to 1.

Cards

Small pieces of laminated paper or plastic printed with a number, symbol, or illustration, used for playing games, as a medium of exchange, or for identification.

Probability

A statistical concept that quantifies the chance of a given event occurring, often expressed as a ratio or percentage.

Cards

Pieces of thick, flat material, often made of paper or plastic, used for various games, information storage, or special occasions.