Multiple Choice
Sewing World had an all equity cost of capital of 12 percent.When the firm switched to being levered its cost of equity increased to 13.4 percent and its pretax cost of debt was 7.5 percent.What was the firm's debt-equity ratio after the switch? Ignore taxes.
A) .31
B) .33
C) .47
D) .45
E) .17
Correct Answer:
Verified
Correct Answer:
Verified
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