A Firm Has a Debt-Equity Ratio of 1,a Cost of Equity

question 5

Multiple Choice

A firm has a debt-equity ratio of 1,a cost of equity of 16 percent,and a cost of debt of 8 percent.If there are no taxes or other imperfections,what is its unlevered cost of equity?

• A)8 percent
• B)10 percent
• C)12 percent
• D)14 percent
• E)16 percent

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Definitions:

Drawing Tools Format Tab

A feature in certain software applications that provides tools for creating and formatting graphical elements.

Size Group

A feature in software that allows users to categorize or group objects based on their size.

Selected Shape's Height

The Selected Shape's Height refers to the measurement of a chosen graphical object’s vertical dimension in a graphical editor or design software.

Picture Styles Gallery

A collection or interface in software applications where users can choose from various preset effects to apply to images.