If a Firm Is Unlevered and Has a Cost of Equity

question 43

Multiple Choice

If a firm is unlevered and has a cost of equity capital of 13.7 percent,what would be the cost of equity if its debt-equity ratio was revised to .4? The expected cost of debt is 7.4 percent and there are no taxes.

• A)15.54 percent
• B)15.67 percent
• C)16.09 percent
• D)16.22 percent
• E)16.36 percent

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Definitions:

Hierarchical List

An organized structure of items or elements ranked or sorted based on levels of importance, priority, or classification.

Role Play

An educational or therapeutic technique in which participants act out roles in specific scenarios to learn, practice behaviors, or solve problems.

Feeling Word Checklists

Tools used in psychological assessments to help individuals articulate their emotions by selecting descriptive words.

Behavior Checklists

Behavior checklists are structured lists used for assessing the presence or absence of specific behaviors or symptoms.