A Firm Requires an Investment of $30,000 and Borrows $10,000

question 38

Multiple Choice

A firm requires an investment of $30,000 and borrows $10,000 at 6%.If the tax rate is 30%,and the firm's WACC is 11.4%,what is the firm's cost of equity?

• A)15%
• B)14.1%
• C)5.4%
• D)17.4%
• E)15.6%

---

Definitions:

Blue Car

A vehicle characterized by its blue coloration.

Hasty Generalizations

Logical fallacies that occur when a conclusion is made about a whole group based on insufficient evidence from a few examples.

Fallacies

Erroneous argumentative patterns or misleading reasoning that undermine the logic of an argument.

False

A term indicating that a statement or proposition does not align with reality or is incorrect.