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    Principles of Corporate Finance
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    Exam 17: Does Debt Policy Matter
  5. Question
    A Firm Has a Debt-To-Equity Ratio of 0
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A Firm Has a Debt-To-Equity Ratio of 0

Question 21

Question 21

Multiple Choice

A firm has a debt-to-equity ratio of 0.50.Its cost of debt is 10%.Its overall cost of capital is 14%.What is its cost of equity if there are no taxes?


A) 13%
B) 16%
C) 15%
D) 18%

Correct Answer:

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