Qantas Is Discussing New Ways to Recapitalise and Raise Additional

question 14

Multiple Choice

Qantas is discussing new ways to recapitalise and raise additional capital. Its current capital structure has a 20% weight in ordinary shares, 10% in preference shares, and 70% in debt. The cost of equity capital is 14%, the cost of preference shares is 10%, and the pretax cost of debt is 9%. What is the weighted average cost of capital for Qantas if its marginal tax rate is 30%?

• A) 9.21%
• B) 8.21%
• C) 8.89%
• D) 7.87%

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Definitions:

Deceptions

Acts of making someone believe something that is not true, often for personal gain or advantage.

Debriefing

A procedure conducted after completing an activity or study, often in research, to inform participants about the study's purpose, answer questions, and address any negative effects.

True Purpose

Refers to the underlying or genuine intention behind an action or existence.

Supportive Friends

Individuals who provide emotional, social, and practical support to someone.