A Firm Has a Debt-To-Equity Ratio of

question 43

Multiple Choice

A firm has a debt-to-equity ratio of .60.Its cost of debt is 8%.Its overall cost of capital is 12%.What is its cost of equity if there are no taxes or other imperfections?

• A)10.0%
• B)13.5%
• C)14.4%
• D)18.0%
• E)None of the above.

Appreciate the interdisciplinary nature of psychology and its relationship with other fields.

Understand the importance of empirical evidence and scientific methods in psychology.

Identify the ethical considerations in psychological research and practice.

Recognize the theoretical diversity within psychology and its implications for understanding behavior and mental processes.

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Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, usually with predetermined dividend payments.

Statement of Cash Flows

A financial report that shows how changes in balance sheet accounts and income affect cash and cash equivalents.

Direct Method

A way of preparing the cash flow statement where actual cash flows from operating activities are reported.

Income Taxes Payable

This liability account shows the amount of income taxes owed to the government but not yet paid by a company.