Use the Information for the Question(s)below

question 19

Multiple Choice

Use the information for the question(s) below.
KT Enterprises is considering undertaking a new project.Based upon analysis of firms with similar projects,KT has determined that an unlevered cost of equity of 12% is suitable for their project.KT's corporate tax rate is 21%,its borrowing rate is 7%,and KT does not believe that its borrowing rate will change if the new project is accepted.
-If KT expects to maintain a debt to equity ratio for this project of .6 then KT's project-based WACC,rwacc,for this project is closest to:

• A)10.5%.
• B)11.5%.
• C)9.6%.
• D)10.8%.

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Definitions:

Latissimus Dorsi

A large, flat muscle on the back that helps in movement of the shoulder and arm, including extension and rotation.

Teres Major

An upper limb muscle that helps rotate and draw the arm towards the body.

Coracobrachialis

A muscle in the shoulder that assists in flexing and adducting the arm.

Humerus

The long bone in the arm or forelimb that runs from the shoulder to the elbow.