Dexter United Has a Debt-Equity Ratio Of

question 184

Multiple Choice

Dexter United has a debt-equity ratio of.70 and a tax rate of 34 %. The firm does not issue preferred stock. The cost of equity is 15 % and the pre-tax cost of debt is 8.5 %. What is Dexter's weighted average cost of capital?

• A) 10.57 %
• B) 10.74 %
• C) 11.13 %
• D) 12.32 %
• E) 12.60 %

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