Central Systems, Inc

question 63

Multiple Choice

Central Systems, Inc. desires a weighted average cost of capital of 8 percent. The firm has an aftertax cost of debt of 4.8 percent and a cost of equity of 15.2 percent. What debt-equity ratio is needed for the firm to achieve its targeted weighted average cost of capital?

• A)0.38
• B)0.44
• C)1.02
• D)2.25
• E)2.63

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Definitions:

Psychoanalysis

A method of analyzing psychic phenomena and treating emotional disorders that involves dialogue between a patient and a psychoanalyst.

Communication Process

The sequence of steps or events comprising message creation, transmission, reception, and interpretation by the involved parties.

Intimacy

A close, familiar, and usually affectionate or loving personal relationship with another person or group.

Objectified Others

The concept of viewing and treating people as objects without regard to their personality, dignity, or individuality.