Down Bedding Has an Unlevered Cost of Capital of 13

question 8

Multiple Choice

Down Bedding has an unlevered cost of capital of 13 percent, a cost of debt of 7.8 percent, and a tax rate of 32 percent. What is the target debt-equity ratio if the targeted cost of equity is 15.51 percent?

• A).63
• B).68
• C).71
• D).76
• E).84

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Definitions:

Non-selling Time

A period where sales activities are not being performed, often involving administrative or preparatory work.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company.

Return on Time Invested

Return on Time Invested (ROTI) is a measure of the value or benefits gained from the time spent on a particular activity, assessing efficiency and effectiveness.

Time Management Skills

The skill of managing one's time efficiently and being productive, particularly in a professional setting.