APM Inc. is in the property management business and has a required return on its assets of 14%. It can borrow in the debt market at 7%. If there are no taxes and M&M's proposition II holds, what is the cost of equity if there is 30% equity financing and 70% debt financing?

Cost of equity is 30.33%

Explanation:

A required return on assets of 14% means that a company requires a minimum acceptable rate of return of 14% at any investment which must yield the said return for its investors or for the resources/assets invested therein. We may use this return as the Company's Weighted Average Cost of Capital (WACC).

WACC formula:

WACC = ((Weight of debt financing) * (after tax cost of debt)) + ((Weight of equity financing) * (cost of equity))

Substituting the values, we get "X" as the weighted cost of equity (assuming no taxes as stated in the problem):

14% = (70%*7%) + X

14% = 4.900% + X

X = 9.100%

To get the cost of equity, we substitute the values for the following formula of the weighted cost of equity to get "X" as the cost of equity:

Weighted cost of equity = Weight of equity financing * cost of equity

9.100% = 30% * X

X = 30.33%

Cost of equity is 30.33%

answer: b) the us is the leading importer but not the leading exporter.

extra info:

the u.s is the largest importer but it is not the largest exporter as china sits on the top of the table when it comes to leading exporters.

but u.s is not far from first,

they rank in 2nd globally as the worlds largest exporter.

happy to

pls mark as brainliest

answer; (c) communism and socialism;