The Weighted Average Cost of Capital for Patrick Corp

question 25

Multiple Choice

The weighted average cost of capital for Patrick Corp.is currently 10%.Patrick Corp.is considering a new project but must raise new debt to finance the project.Debt represents 25% of the capital structure.If the after tax cost of debt will rise from 6% to 10%,what is the marginal cost of capital?

• A) 10.25%
• B) 10.75%
• C) 11.00%
• D) 11.50%

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Definitions:

Grignard Synthesis

The formation of a Grignard compound through the reaction of an alkyl or aryl halide with magnesium in dry ether.

Spectroscopic Data

Information obtained from analyzing the interaction between electromagnetic radiation and matter, used to determine chemical composition and structure.

Infrared Spectrum

A spectrum representing the infrared absorption or emission by a substance, used to identify chemical functionalities and molecular structure.

Mass Spectrum

A plot or record that shows the distribution of ions by mass in a sample, used to determine the composition of a substance.