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:

Bandage

A strip of material used to support, protect, or compress a wound or injured part of the body.

Sutures

Threads or stitches used by surgeons to close wounds or surgical incisions.

Gauze Sponges

Sterile, absorbent pads made of cotton or synthetic fabric used in medical settings for wound care and absorption of fluids.

Excessive Blood

This term could refer to conditions where there is an abnormally large amount of blood within the body or an area of the body, typically relating to bleeding or hemorrhage.