What is return on levered equity

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Reference no: EM131346621

1. A firm requires an investment of $18,000 and will return $25,000 after one year. If the firm borrows $10,000 at 6%, what is the return on levered equity?

A) 112%

B) 80%

C) 96%

D) 64%

2. A firm requires an investment of $20,000 and will return $26,500 after one year. If the firm borrows $6000 at 7%, what is the return on levered equity?

A) 52%

B) 35%

C) 43%

3. A firm requires an investment of $30,000 and borrows $15,000 at 7%. If the return on equity is 19%, what is the firm's pretax WACC?

A) 15.6%

B) 18.2%

C) 6.5%

D) 13%

Reference no: EM131346621

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