A Firm Has a Market Value of Assets of $50,000

question 94

Multiple Choice

A firm has a market value of assets of $50,000.It borrows $10,000 at 5%.If the unlevered cost of equity is 15%,what is the firm's cost of equity capital?

• A)17.5%
• B)18.5%
• C)19.2%
• D)20.6%

Comprehend the role and impact of SCADA systems in monitoring and controlling processes.

Understand the function and purpose of repeaters in a network.

Understand how signals are maintained and boosted in long-distance network communications.

Understand the concept and benefits of scenario planning.

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Definitions:

Semi-annually Compounded

Relating to the process in which the interest on a loan or investment is calculated and added to the principal amount twice a year.

Effective Annual Rate

A measure of the true interest rate accounting for the effects of compounding over a year.

Contributions

Amounts given or donated to a particular cause, project, or for a retirement account.

Effective Rate of Return

A measure of the return on an investment that accounts for the effect of compounding over a specified time period.