The Park Place Has a Return on Assets of 13

question 43

Multiple Choice

The Park Place has a return on assets of 13.7 percent,a cost of equity of 20 percent,and a pretax cost of debt of 7.1 percent.What is the debt-equity ratio? Ignore taxes.

• A)0.44
• B)0.47
• C)0.61
• D)0.88
• E)0.95

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Definitions:

Constitution

A written or unwritten system of fundamental laws and principles governing a nation, state, or organization.

Markets

Physical or virtual places where goods, services, or securities are exchanged between buyers and sellers.

Positivism

A philosophical approach asserting that knowledge should be based on empirical and scientific evidence rather than theories.

Scientific Revolution

The period in history during the 16th and 17th centuries marked by major advances in science, transforming views of society and the natural world.