Question
1. Acme Dynamite is maintaining a solid debt ratio of .37 with total assets of $1,250 million. If its D/E ratio is .65 and it
1. Acme Dynamite is maintaining a solid debt ratio of .37 with total assets of $1,250 million. If its D/E ratio is .65 and it has NOI of $150 million, what is its return on equity? a. 27.6% b. 21.1% c. 14.6% d. 8.9% e. None of the above. b: Now that you calculated the ROE for Acme Dynamite, how much debt does it have? a. $711.5 b. $358.6 c. $437.5 d. $462.5 e. None of the above. c: Acme Dynamite has a beta of 1.5. If the risk-free rate is 3.5% and the expected market return is 7.6%, what is the companys cost of equity? (Do not enter a percent sign. Enter as an integer.)
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