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1) A change in fixed cost: A

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1) A change in fixed cost:

A. Has no effect on the contribution margin.

B. Always decreases profits.

C. Decreases the contribution margin ratio.

D. Increases the contribution margin ratio

E. Increases the contribution margin.

2) Apex Ltd. has a tax rate of 30% and the interest rate on debt of 8%. The firm's WACC is 11.36% and debt-asset ratio is 60%. What is the expected rate of return to equity holders?