Alpha Inc has twice as much debt at Beta Ltd Beta Ltd has the same amount of equity but a third of the debt of Theta Corporation that has $400,000 in debt and a debt equity ratio of 2 If the cost of debt for Alpha Inc is 7 per annum, how much is Alpha Inc s annual debt interest and what is Beta Ltd s debt equity ratio a Annual Debt Interest $9,333 and debt equity ratio 0 67 b Annual Debt Interest $28,000 and debt equity ratio 2 c Annual Debt Interest $18,667 and debt equity ratio 0 67 d Annual Debt Interest $18,667 and debt equity ratio 3 e Annual Debt Interest $9,333 and debt equity ratio 3

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Question: Alpha Inc. has twice as much debt at Beta Ltd. Beta Ltd. has the same amount of equity but a third of the debt of

Alpha Inc. has twice as much debt at Beta Ltd. Beta Ltd. has the same amount of equity but a third of the debt of Theta Corporation that has $400,000 in debt and a debt/equity ratio of 2. If the cost of debt for Alpha Inc. is 7% per annum, how much is Alpha Inc.s annual debt interest and what is Beta Ltd.s debt/equity ratio?

Annual Debt Interest = $9,333; and debt/equity ratio = 0.67

Annual Debt Interest = $28,000; and debt/equity ratio = 2

Annual Debt Interest = $18,667; and debt/equity ratio = 0.67

Annual Debt Interest = $18,667; and debt/equity ratio = 3

Annual Debt Interest = $9,333; and debt/equity ratio = 3

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