Given the Following, What Is the WACC? EBIT = $2

question 110

Multiple Choice

Given the following, what is the WACC? EBIT = $2 million; tax rate = 34%; market value and book value of debt = $4 million; unlevered cost of capital = 14%; cost of debt = 9%.

• A) 11.4%
• B) 11.9%
• C) 12.2%
• D) 12.6%
• E) 13.1%

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Definitions:

Corn

A cereal plant that yields large kernels set in rows on a cob; an important crop for food, animal feed, and industrial products.

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The additional cost incurred in producing one more unit of a good or service, critical in decision-making regarding production volumes.

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