A firm operating in perfect capital markets pays 6% on its debt and its cost of equity is 12%. If the firm's weighted average cost of capital is 8 %, what is the firm's D/E ratio? Question 15 options: 1.0 0.5 1.5 2.0
A firm operating in perfect capital markets pays 6% on its debt and its cost of equity is 12%. If the firm's weighted average cost of capital is 8 %, what is the firm's D/E ratio? Question 15 options: 1.0 0.5 1.5 2.0
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:A firm operating in perfect capital markets pays 6% on its debt and its cost of equity is 12%. If the firm's weighted
average cost of capital is 8 %, what is the firm's D/E ratio?
Question 15 options:
1.0
0.5
1.5
2.0
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