What Is the Expected Return on Equity for Firm in the 40

question 58

Multiple Choice

What is the expected return on equity for firm in the 40% tax bracket with a 15% expected return on assets that pays 12% on its debt, which totals 25% of assets?

• A)24%
• B)15.60%
• C)16%
• D)20%
• E)15.75%

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