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JL Lumber Has a Debt-Equity Ratio of

Question 43

Multiple Choice

JL Lumber has a debt-equity ratio of .62.The firm's required return on assets is 12 percent and its current cost of equity is 15.60 percent.What is the firm's pretax cost of debt? Ignore taxes.


A) 6.45%
B) 6.03%
C) 6.25%
D) 6.40%
E) 6.19%

Correct Answer:

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