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%
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- 2 What is the expected return on equity for a firm with a 14% expected return on assets that pays 9% on its debt, which totals 30% of assets? A 16.14% B 25.67% C₁ 19.00% D 17.00% OA O C OD O BEstimating Cost of Equity Capital Assume that a company’s market beta equals 0.8, the risk-free rate is 5%, and the market return equals 8%. Compute the company’s cost of equity capital. Round answer to one decimal place (ex: 0.0245 = 2.5%) Answer%Provide correct answer financial accounting
- The assets of company X have a beta equal to 1. Assume that the company's debt has a beta equal to 0.5 and that X's equity has a beta equal to 2. Consider an investor who holds 10% of the company's total debt liabilities and 10% of the company's equity. The beta of the investor's portfolio is equal to A) 0.1 B)1 C) 0.25 D) 1.25Need answerWhat is the WACC for a firm using 65% equity with a required return of 15%; 35% debt with a YTM of 8%, and a tax rate of 35%? Question 20 options: A.10.72% B. 11.07% C. 12.55% D. 11.57%
- Assume a firm is financed with $7500 debt and $2500 equity. The beta of the equity is 1.1. The risk-free rate is 3%, and the equity premium is 6%. If the overall cost of capital of the firm is 8%, what is the beta of the firmʹs debt? Group of answer choices 0.28 0.14 0.92 0.7412 Gates Appliances has a return-on-assets (investment) ratio of 20 percent. a. If the debt-to-total-assets ratio is 25 percent, what is the return on equity? (Input your answer as a percent rounded to 2 decimal places.) Return on equity % b. If the firm had no debt, what would the return-on-equity ratio be? (Input your answer as a percent rounded to 2 decimal places.) Return on equityGiven that a firm's return on equity is 18% and management plans to retasin 40% fo earnings for investment purposes, what will be the firm's growth rate? a. 18% b. 7.2% c. 3.2% d. 40%