The before-tax cost of long-term debt is 10% and the cost of equity is 12%. The marginal tax rate is 35%. The company's current ratio is:
A. 0.46.
B. 0.59.
C. 0.93.
D. 1.37.
Answer:D
The before-tax cost of long-term debt is 10% and the cost of equity is 12%. The marginal tax rate is 35%. The company's current ratio is:
A. 0.46. B. 0.59. C. 0.93. D. 1.37.