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APM IncIs in the Property Management Business and Has a Required

Question 43

Multiple Choice

APM Inc.is in the property management business and has a required return on its assets of 14%.It can borrow in the debt market at 7%.If there are no taxes and M&M's proposition II holds,what is the cost of equity if there is 30% equity financing and 70% debt financing?


A) 55%
B) 40%
C) 30%
D) 16%

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