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If the Cost of Debt Is 5% and Equity Is

Question 18

Multiple Choice

If the cost of debt is 5% and equity is 10% and 40% of assets are financed by debt and 60% are financed by equity, the cost of capital is

A) 5.0%
B) 7.0%
C) 7.5%
D) 8.0%
E) 10.0%

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