Question: Determine the expected return on equity for a firm with a WACC of 16%, $800,000 in 6% debt, and $700,000 in equity. Both debt and

Determine the expected return on equity for a firm with a

Determine the expected return on equity for a firm with a WACC of 16%, $800,000 in 6% debt, and $700,000 in equity. Both debt and equity are shown at market values, and the firm pays no taxes. How can the expected return on equity be reduced? 27.43%; reduce debt 14.00%; reduce debt 7.47%; add debt 10.27%; add debt

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