If KT Expects to Maintain a Debt to Equity Ratio

question 51

Multiple Choice

If KT expects to maintain a debt to equity ratio for this project of .6 then KT's equity cost of capital,r_E,for this project is closest to:

• A)5.0%
• B)12%
• C)15.0%
• D)17.0%

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Definitions:

Land

A physical, immovable property asset, representing the earth's surface not including bodies of water or resources below the surface.

Cash Dividend

A distribution of profits by a corporation to its shareholders in the form of cash.

Stock Dividend

A dividend payment made to shareholders in the form of additional shares of stock, rather than cash.

Retained Earnings

Profit that remains after dividends are paid, which is reinvested in the company or used to pay off debt.