Question
Given the following information: The rate of return on assets (R a ) .16 The cost of debt (i) .05 The standard Deviation of R
Given the following information:
| The rate of return on assets (Ra) | .16 |
| The cost of debt (i) | .05 |
| The standard Deviation of Ra () | .09 |
| The Tax Rate (t) | .25 |
Calculate the risk as defined by the standard deviation of the rate of return to equity if leverage is 1.5.
| .0525 | ||
| .16875 | ||
| .58102 | ||
| None of the answers are correct |
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Behavioural Approaches To Corporate Governance
Authors: Cameron Elliott Gordon
1st Edition
1138611395, 978-1138611399
