Use the Information for the Question(s)below

question 6

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 currently maintains a debt to equity ratio of 1,then Flagstaff's after-tax WACC is closest to:

• A)10.25%.
• B)10.00%.
• C)9.50%.
• D)9.25%.

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Definitions:

Facility Locations

The geographic placement of business operations, including factories, warehouses, and retail outlets, to optimize logistics and customer reach.

Optimization Model

A mathematical model designed to find the best possible solution to a problem within given constraints.

Mathematical Procedures

Systematic operations or calculations that follow a fixed series of steps to solve mathematical problems or analyze data.