Assume the M&M world with perfect capital markets. Your firm is levered with 40% debt and 60% equity. The firm’s cost of debt is 5% regardless of leverage. Under the current capital structure, the firm’s cost of equity is 15%.1. What is the firm’s current cost of capital (i. e. pre-tax WACC)?A. 18%B. 20%C. 15%D. 11%2. What would be the firm’s cost of capital if the firm were unlevered?A. 18%B. 15%C. 11%D. 20%

The business cycle is the periodic but irregular up-and-down movement in economic activity, measured by fluctuations in real gross domestic product (gdp) and other macroeconomic variables. a business cycle is typically characterized by four phases—recession, recovery, growth, and decline—that repeat themselves over time. economists note, however, that complete business cycles vary in length. the duration of business cycles can be anywhere from about two to twelve years, with most cycles averaging six years in length. some business analysts use the business cycle model and terminology to study and explain fluctuations in business inventory and other individual elements of corporate operations. but the term "business cycle" is still primarily associated with larger (industry-wide, regional, national, or even international) business trends.