The Water Works Has a Return on Assets of 13

question 86

Multiple Choice

The Water Works has a return on assets of 13.7 percent, a cost of equity of 18.6 percent, and a pre-tax 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) 0.68
• E) 0.74

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