The Park Place has a return on assets of 13.7 percent,a cost of equity of 20 percent,and a pretax cost of debt of 7.1 percent.What is the debt-equity ratio? Ignore taxes.
A)0.44
B)0.47
C)0.61
D)0.88
E)0.95

Name: The Park Place has a return on assets of 13.7 percent,a cost of equity of 20 percent,and a pretax cost of debt of 7.1 percent.What is the debt-equity ratio? Ignore taxes. A)0.44 B)0.47 C)0.61 D)0.88 E)0.95
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0.20 = 0.137 + [(0.137 - 0.071) × R_D]R_D = 0.95

The Park Place Has a Return on Assets of 13