Werner Corporation Has a Target Capital Structure That Consists of 40

question 35

Multiple Choice

Werner Corporation has a target capital structure that consists of 40 percent debt and 60 percent equity. Werner can borrow at an interest rate of 10 percent. Also, Werner has determined its cost of equity to be 14 percent. Werner's tax rate is 20 percent. What is Werner's weighted average cost of capital?

• A) 10.8 percent
• B) 12.4 percent
• C) 9.2 percent
• D) 11.6 percent

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Definitions:

Proteins

Large, complex molecules essential for the structure, function, and regulation of the body's tissues and organs.

Lipids

A diverse group of naturally occurring molecules that include fats, waxes, and oil, serving as energy storage and structural components of cell membranes.

Carbohydrates

Organic compounds made of carbon, hydrogen, and oxygen, serving as a major energy source for the body.

Denature Enzymes

The process by which enzymes lose their functional shape and, therefore, their activity, often due to changes in temperature or pH.