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

question 99

Multiple Choice

Use the following information to answer the question(s) below.
Luther Industries has 25 million shares outstanding trading at $18 per share.In addition,Luther has $150 million in outstanding debt.Suppose Luther's equity cost of capital is 13%,its debt cost of capital is 7%,and the corporate tax rate is 21%.
-Luther's weighted average cost of capital is closest to:

• A)9.8%.
• B)10.8%.
• C)11.1%.
• D)13.0%.

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Definitions:

Blastocyst

An early stage in human embryonic development, a structure formed approximately 5 days after fertilization, consisting of an inner cell mass, a fluid-filled cavity, and an outer layer of cells.

Morula

is an early stage in embryonic development, a solid ball of cells resulting from the division of a fertilized ovum.

Zygote

The cell that is formed from the union of the egg and sperm.

Mesoderm

The middle layer of an embryo in early development, which gives rise to muscles, bones, and other connective tissues.