Sparty has a levered cost of equity of 15% and a pretax cost of debt of 5%.

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Sparty has a levered cost of equity of 15% and a pretax cost of debt of 5%. The cost of capital is 11%. What is the firms debt-equity ratio based on MM Proposition II?

a. 0.6

b. 0.4

c. 0.87

d. 0.67

Posted Date: May 16, 2024 08:00 PM

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Sparty has a levered cost of equity of 15% and a pretax cost of debt of 5%.

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