FALSE

Sometimes true.

return on assets of similar companies remain the same 10.60

Ra = ? e Rm-Rf Rf D/E d a = E/(E+D)*e Ra = Rf+(Rm-Rf)*a

2.3 5% 3.25% 25% 0 1.84 12.45%

d is not available
Do not have enough information to value.

The statement is false.

ABC D C A E A=C/Ra Ra 0 50 500 500

XYZ D 250 d 0 C 50 Re ? Rf 4% Rd 0.04 Ra 0.1 E 500 E/D 2 Ra = E/(E+D)*Re+D/(E+D)*Rd Re 13.00

0.1