Which One of These Statements Correctly Applies to an Unlevered

question 7

Multiple Choice

Which one of these statements correctly applies to an unlevered firm that pays no taxes?

• A) The return on equity exceeds the WACC.
• B) The return on assets equals the return on equity and also equals WACC.
• C) The return on assets equals the return on equity and exceeds WACC.
• D) The return on equity equals WACC and exceeds the return on assets.

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Definitions:

Procedural Flexibility

The ability to adapt the processes and methods used in various situations, allowing for adjustments based on specific circumstances.

Labor-Management Cooperation

Describes initiatives and practices aimed at fostering collaborative relationships between employers and their workers to improve productivity and workplace harmony.

Labor-Management Partnership

Collaborative relationships between employers and labor unions aimed at improving workplace efficiency, productivity, and worker satisfaction.

Joint Decisions

Decisions made collaboratively by two or more parties where the outcomes affect everyone involved, aiming for consensus or compromise.