Use the Information for the Question(s)below

question 10

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 .5 debt to equity ratio,then Flagstaff's pre-tax WACC is closest to:

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

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Definitions:

Maintenance

The process of keeping something in good condition by checking or repairing it regularly.

Salutary Goals

are objectives or outcomes that contribute positively to an individual’s well-being or health.

Health Promoting

Actions or behaviors that contribute to the maintenance or improvement of health and well-being.

Correct Deficiencies

The process of identifying and rectifying lacks or shortcomings in a system, individual skills, or organizational processes.