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Sewing World Has an All-Equity Cost of Capital of 11

Question 41

Multiple Choice

Sewing World has an all-equity cost of capital of 11.72 percent,a levered cost of equity of 12.94 percent,and a pretax cost of debt of 6.8 percent.What is the firm's levered debt-equity ratio if you ignore taxes?


A) 0.248
B) 0.333
C) 0.347
D) 0.264
E) 0.317

Correct Answer:

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