Suppose Blank Company Has Only One Project, as Forecast Above

question 109

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) 10.28%

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