Were Hired as a Consultant to Quigley Company, Whose Target

question 82

Multiple Choice

were hired as a consultant to Quigley Company, whose target capital structure is 35% debt, 10% preferred, and 55% common equity.The interest rate on new debt is 6.50%, the yield on the preferred is 6.00%, the cost of common from retained earnings is 11.25%, and the tax rate is 40%.The firm will not be issuing any new common stock.What is Quigley's WACC?

• A)8.15%
• B)8.48%
• C)8.82%
• D)9.17%
• E)9.54%

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Definitions:

Internal Control Steps

Procedures and mechanisms implemented by a firm to safeguard assets, enhance the reliability of financial reports, and comply with laws.

Reverse Order

A method of organizing or sequencing items so that the last becomes first and the first becomes last.

Last-In, First-Out

An inventory management and valuation method where the most recently produced or acquired items are sold or used first.

Perpetual Inventory System

An inventory tracking system that updates the balance of inventory continuously with each sale or purchase.