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:

Percentile

In statistics, this term refers to the threshold under which a specific percentage of data within a collection is observed.

Interquartile Range

The difference between the 75th and 25th percentiles of a dataset, representing the spread of the middle 50% of the data.

Tchebysheff's Theorem

A statistical theorem stating that for any distribution, the proportion of outcomes within k standard deviations of the mean is at least 1-1/k^2 for k>1.

Measure Of Shape

Statistical indicators that describe how a dataset is distributed along the axis, including skewness and kurtosis, which indicate asymmetry and the peakedness of the data distribution, respectively.