Debbie's Cookies Has a Return on Assets of 12

question 69

Multiple Choice

Debbie's Cookies has a return on assets of 12.6 percent and a cost of equity of 14.8 percent.What is the pretax cost of debt if the debt-equity ratio is .38? Ignore taxes.

• A)5.87 percent
• B)95.29 percent
• C)9.04 percent
• D)7.31 percent
• E)6.81 percent

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Definitions:

Statute of Frauds

The Statute of Frauds is a legal principle that requires certain types of contracts to be in writing and signed by the party to be charged, in order to be enforceable.

CISG

The United Nations Convention on Contracts for the International Sale of Goods, a treaty that provides a uniform and fair regime for contracts for the international sale of goods.

Corporate Stocks

Equity securities that represent ownership shares in a corporation, entitling holders to a share of the corporation's profits through dividends.

Implied Title

A legal concept indicating ownership rights that are not documented but assumed through one's actions or circumstances.