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A firm's optimal capital structure: Select one: a. exists when the debt-equity ratio is.50. b. is generally a mix of 40 percent debt and 60
A firm's optimal capital structure: Select one: a. exists when the debt-equity ratio is.50. b. is generally a mix of 40 percent debt and 60 percent equity. c. is the debt-equity ratio that results in the lowest possible weighted average cost of capital. d. is the debt-equity ratio that exists at the point where the firm's weighted aftertax cost of debt is minimized. Jennifer's Boutique has a pre-tax cost of debt of 9 percent and a return on assets of 14 Percent. The debt-equity ratio is .75. Ignore taxes. What is the cost of equity? M&M PROPOSITION II, WITHOUT TAXES Select one: a. 10.4% b. 30.0% c. 17.75 % d. 50%
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