Which One of the Following Represents the Rate of Return

question 32

Multiple Choice

Which one of the following represents the rate of return a firm must earn on its assets if it is to maintain the current value of its securities?

• A)debt-equity ratio
• B)after-tax cost of debt
• C)internal rate of return
• D)cost of equity
• E)weighted average cost of capital

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Definitions:

Scientific Theory

A well-substantiated explanation of some aspect of the natural world, based on a body of facts that have been repeatedly confirmed through observation and experiment.

Statistical Validation

The process of evaluating the correctness and reliability of a statistical model or measurement through rigorous testing and analysis.

Critical Thinking

The goal of critically examining and assessing a matter to come to a decision.

Unconditional Positive Regard

An attitude of total acceptance and support towards another person, irrespective of what they say or do.