You Were Hired as a Consultant to Quigley Company,whose Target

question 18

Multiple Choice

You 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 retained earnings is 11.25%,and the tax rate is 40%.The firm will not be issuing any new 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:

Method of Loci

A mnemonic device that involves visualizing items to be remembered in specific locations within an imaginary or real physical space.

Tip-of-the-tongue Phenomenon

The frustrating experience of being unable to fully recall a word or name, while feeling that retrieval is imminent.

Retrieval-delay Syndrome

This term does not have a widely recognized definition in psychology or medicine -- NO.

Pseudoamnesia Phenomenon

A false or feigned inability to remember past events, often due to psychological factors.