Use the Following Information to Answer the Question(s)below

question 64

Multiple Choice

Use the following information to answer the question(s) below.
Rearden Metal is evaluating a project that requires an investment of $150 million today and provides a single cash flow of $180 million for sure one year from now.Rearden decides to use 100% debt financing for this investment.The risk-free rate is 5% and Rearden's corporate tax rate is 21%.Assume that the investment is fully depreciated at the end of the year.
-The WACC for this project is closest to:

• A)4.0%.
• B)5.0%.
• C)7.0%.
• D)8.2%.

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Definitions:

Mindfulness

In positive psychology, the idea that one should be consciously aware of and in control of every moment of your subjective experience.

Flow

The totally absorbing experience of engaging in an activity that is valuable for its own sake. In flow, mood is slightly elevated and time seems to pass quickly.

Awe

A feeling of reverential respect mixed with fear or wonder inspired by what is considered sublime or powerful.

Nirvana

In Buddhism, a transcendent state free from suffering and individual existence, achieved through enlightenment.