TAFKAP Industries Has 8 Million Shares of Stock Outstanding Selling

question 6

Multiple Choice

TAFKAP Industries has 8 million shares of stock outstanding selling at $17 per share and an issue of $20 million in 7.5 percent, annual coupon bonds with a maturity of 15 years, selling at 109 percent of par ($1,000) . If TAFKAP's weighted average tax rate is 21% and its cost of equity is 12.5 percent, what is TAFKAP's WACC?

• A) 11.02 percent
• B) 11.49 percent
• C) 12.16 percent
• D) 12.83 percent

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Definitions:

Rumination

The act of continuously thinking about the same thoughts, typically negative, which causes emotional distress.

Insomnia

An ailment marked by challenges in both initiating and maintaining sleep.

Social-cognitive Perspective

A psychological approach that emphasizes the influence of cognitive processes and social contexts on behavior.

Disorganized Thinking

A state of thought characterized by illogical or incoherent thought processes, often seen in severe mental disorders.