Use the Information for the Question(s)below

question 13

Multiple Choice

Use the information for the question(s) below.
The Aardvark Corporation is considering launching a new product and is trying to determine an appropriate discount rate for evaluating this new product.Aardvark has identified the following information for three single division firms that offer products similar to the one Aardvark is interested in launching:
-The unlevered cost of capital for Anteater Enterprises is closest to:

• A)10.1%.
• B)9.5%.
• C)9.9%.
• D)10.3%.

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Definitions:

Personally Liable

The state of being legally responsible for one's actions on an individual basis, which can result in personal financial liability.

Partnership

A form of business conduct legally established among at least two partners with shared responsibilities and profit distribution.

Debts

Money owed by one party to another under an agreement that the amount will be paid back, often with interest, by a certain date.

Limited Partnership

A partnership consisting of one or more general partners and one or more limited partners.