A Firm Requires an Investment of $30,000 and Borrows $10,000

question 45

Multiple Choice

A firm requires an investment of $30,000 and borrows $10,000 at 6%. If the return on equity is 15% and the tax rate is 30%, what is the firm's WACC?

• A) 11.4%
• B) 10.1%
• C) 7.8%
• D) 12.3%

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Definitions:

Reproductively Isolated

A state in which different groups of organisms can no longer interbreed and produce fertile offspring, leading to speciation.

Fertile Offspring

Offspring that are capable of reproducing, indicating successful genetic combination and viability.

Species

A fundamental category in biological taxonomy, defined as a group of organisms capable of interbreeding and producing fertile offspring.

Evolution

The method through which various types of living beings are believed to have evolved and varied from their early ancestors over the Earth's history.