What Proportion of the Firm Is Financed by Debt for a Firm

question 91

Multiple Choice

What proportion of the firm is financed by debt for a firm that expects a 15 percent return on equity,a 12 percent return on assets,and a 10 percent return on debt? The tax rate is 25 percent.

• A)20 percent
• B)1/3
• C)60 percent
• D)2/3

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Definitions:

Behavioural

Pertains to the observable actions or responses of an organism, often studied in psychology to understand the underlying mental processes and motivations.

Cognitive

Relating to mental processes such as perception, memory, thinking, and problem-solving.

Physiological Arousal

A state of heightened physiological activity, involving the nervous and endocrine systems, often in response to stimuli.

Autonomic Nervous System

A part of the peripheral nervous system that controls involuntary bodily functions, including heart rate, digestion, and respiratory rate.