Suppose Blank Company Has Only One Project,as Forecast Above,and an Unlevered

question 66

Multiple Choice

Suppose Blank Company has only one project,as forecast above,and an unlevered cost of equity of 8%.If the company uses no leverage,what is expected return to equity holders?

• A)8.0%
• B)11.6%
• C)9.33%
• D)30.0%
• E)33.3%

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Definitions:

Operating Activities

Transactions and events related to the primary operations of a business, including revenue and expense activities.

Accounts Receivable

Funds that clients or customers are required to pay to a business for products or services delivered on credit.

Sales Revenues

The income received by a company from its sales of goods or services before any expenses are subtracted.

Accounts Payable

An account representing short-term liabilities to suppliers or creditors for goods and services received but not yet paid for.