Calculate the Weighted Average Cost of Capital WACC) Based on the Following

question 42

Multiple Choice

Calculate the weighted average cost of capital WACC) based on the following information: the capital structure weights are 50% debt and 50% equity; the interest rate on debt is 10%; the required return to equity holders is 20%; and the tax rate is 30%.

• A) 7%
• B) 10%
• C) 13.5%
• D) 17.5%
• E) 20%

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