Provide correct answer the accounting question Assume a firm is financed with 30% debt on which it pays 9%.What is the expected return on equity if the expected return onassets is 14%?A. 16.14%B. 17.96%C. 14.92%D. 15.50%

Given information:- Debt ratio = 30% (therefore Equity ratio = 70%)- Cost of debt = 9%- Return on…

Answered: Assume a firm is financed with 30% debt…

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter14: Security Structures And Determining Enterprise Values

Section: Chapter Questions

Problem 12EP

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General Accounting
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Subject : Accounting
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Assume a firm is financed with 30% debt on which it pays 9%. What is the expected return on equity if the expected return on assets is 14%? A. 16.14% B. 17.96% C. 14.92% D. 15.50%