Multiple Choice
Longmont Inc. has a cost of equity of 12% and a pre-tax cost of debt of 6%. The required return on the assets is 10%. What is the firm's debt-equity ratio based on MM Proposition II with no taxes?
A) .45
B) .50
C) .55
D) .60
E) .65
Correct Answer:
Verified
Correct Answer:
Verified
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