A Firm Has a WACC of 14%,an Expected Return on Equity

question 23

Multiple Choice

A firm has a WACC of 14%,an expected return on equity of 19%,and a debt-to-asset ratio of 60%.If the firm does not pay tax,what is the interest rate on the debt?

• A) 6.50%
• B) 9.90%
• C) 10.67%
• D) 11.14%

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Definitions:

Decent Work

Employment that is productive, delivers a fair income, provides security in the workplace and social protection for families, and encourages social dialogue and respect for rights.

Emissions Trading Scheme

A market-based approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants.

Excess Emissions

The amount of pollutants discharged into the environment that exceeds what is permitted by law or regulation.

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Significant monetary penalties imposed on an individual or company for violations of laws, regulations, or agreements.