What Is the Expected Rate of Return to Equity Holders

question 6

Multiple Choice

What is the expected rate of return to equity holders if the firm has a tax rate of 35%,the interest rate on debt is 10%,WACC is 15%,and the debt-asset ratio is 60%?

• A) 12.50%
• B) 21.25%
• C) 22.50%
• D) 27.75%

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Definitions:

Long-Held Opinions

Beliefs or judgments that have been maintained by someone for an extensive period.

Persuasive Messages

These are communication strategies designed to convince an audience toward a particular belief, action, or attitude.

Requests For Action

Solicitations or appeals directed at someone to undertake a specific task or action.

Persuasive Claims

Statements made to convince or influence someone to believe or do something through reasoning or appeal.