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Assume a Firm Is Financed with 60% Debt on Which

Question 85

Multiple Choice

Assume a firm is financed with 60% debt on which it pays interest of 7%.What is the expected return on equity if the expected return on assets is 12%? Ignore taxes.


A) 16.14%
B) 20.30%
C) 19.50%
D) 21.67%

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