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Author Question: Suppose a levered firm has a debt-to-equity ratio (D/S) of 0.6 and a cost of debt of 16%. The cost ... (Read 56 times)

booty5

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on: Aug 7, 2023

Question 1

Suppose a levered firm has a debt-to-equity ratio (D/S) of 0.6  and a cost of debt of 14%. The cost of equity to an otherwise identical but unlevered firm is 21%. What will be the levered firm’s cost of equity?

◦

25.20%


◦

25.67%


◦

26.30%


◦

27.17%



Question 2

Suppose a levered firm has a debt-to-equity ratio (D/S) of 0.6 and a cost of debt of 16%. The cost of equity to an otherwise identical but unlevered firm is 24%. What will be the levered firm’s cost of equity?

◦

27.10%


◦

27.60%


◦

28.00%


◦

28.80%

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
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Marked as best answer by booty5 on Aug 7, 2023

Yermi196

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Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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booty5

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Reply 2 on: Aug 7, 2023
Wow, this really help

FergA

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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