Multiple Choice
A new business requires a $20,000 investment today,and will generate a one-time cash flow of $25,000 after one year.The business will be financed with 60% equity and 40% debt.If the firm can borrow at 10%,what is the return on levered equity?
A) 25%
B) 35%
C) 15%
D) 42%
E) 17%
Correct Answer:
Verified
Correct Answer:
Verified
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