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

question 104

Multiple Choice

Suppose Blank Company has only one project,as forecast above,and an unlevered cost of equity of 8%.If the company borrows $10,000 at 5% to make the investment,what is the return to equity holders if demand is weak?

• A)8.0%
• B)-37.5%
• C)-58.6%
• D)-35.3%
• E)-12.5%

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