Use the Information for the Question(s)below

question 13

Multiple Choice

Use the information for the question(s) below.
Flagstaff Enterprises expected to have free cash flow in the coming year of $8 million,and this free cash flow is expected to grow at a rate of 3% per year thereafter.Flagstaff has an equity cost of capital of 13%,a debt cost of capital of 7%,and it has a 35% corporate tax rate.
-If Flagstaff maintains a debt to equity ratio of 1,then Flagstaff's pre-tax WACC is closest to:

• A)11.0%.
• B)10.5%.
• C)10.0%.
• D)9.0%.

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Definitions:

Infant

A very young child or baby, typically under one year of age, who is in the earliest stages of physical and cognitive development.

Conservation

The act of preserving, protecting, or restoring the natural environment, natural ecosystems, vegetation, and wildlife.

Concrete Operations

A stage in Piaget's theory of cognitive development where children gain the ability to think logically about concrete events.

Jean Piaget

A Swiss psychologist known for his pioneering work in child development and cognitive theory.