Healthy Snacks Has a Target Capital Structure of 60 Percent

question 82

Multiple Choice

Healthy Snacks has a target capital structure of 60 percent common stock, 3 percent preferred stock, and 37 percent debt.Its cost of equity is 16.8 percent, the cost of preferred stock is 11.4 percent, and the pretax cost of debt is 8.3 percent.What is the company's WACC if the applicable tax rate is 34 percent?

• A)13.29 percent
• B)12.61 percent
• C)12.34 percent
• D)12.45 percent
• E)12.83 percent

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Definitions:

Racial Discrimination

Unfair treatment of individuals based on their race or ethnicity, often manifested in economic, social, and legal exclusions or disadvantages.

Absolute Measure

A quantitative way of assessing a variable or phenomenon that is not relative to other variables or phenomena.

Relative Measure

An assessment or quantification that is expressed as a relationship or comparison to another quantity or unit.

Poverty Threshold

The essential level of earnings required to live a decent life in a certain country.