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.

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ABC Approach

A method used to manage priorities or behaviors, typically identifying Antecedents, Behaviors, and Consequences.

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A developmental stage ranging from about six to twelve years old, characterized by significant growth in social, cognitive, and physical areas.

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A developmental stage occurring approximately between the ages of 6 and 12, characterized by significant growth in cognitive and social abilities.

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A method of problem-solving or assessment that involves breaking down complex topics into simpler components for better understanding.