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

question 32

Multiple Choice

A firm has a market value of assets of $50,000.It borrows $10,000 at 3%.If the unlevered cost of equity is 15%,what is the firm's cost of equity capital?

• A)15%
• B)16%
• C)17%
• D)18%
• E)19%

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Definitions:

Alternative Hypothesis

A statement in hypothesis testing that proposes a significant difference or effect, contrasting the null hypothesis.

Average Amount

The sum of a collection of numbers divided by the count of numbers in the collection.

Sleep

A naturally recurring state of mind and body characterized by altered consciousness, relatively inhibited sensory activity, and inhibition of nearly all voluntary muscles.

Test Of Significance

Statistical tests used to determine the likelihood that a relationship observed in data occurred by chance.