Given Are the Following Data: Cost of Debt = R_D

question 61

Multiple Choice

Given are the following data: Cost of debt = r_D = 6.0%; Cost of equity = r_E = 12.1%; Marginal tax rate = 21%; and the firm has 50 percent debt and 50 percent equity. Calculate the after-tax weighted average cost of capital (WACC) .

• A)8.42 percent
• B)7.1 percent
• C)9.0 percent
• D)5.9 percent