The Wrangler Co

question 327

Multiple Choice

The Wrangler Co. has expected EBIT = $9,250, and debt with a face and market value of $14,000 paying a 9% annual coupon. The market value of the firm is $58,525. If the tax rate is 34%, what is
Wranger's unlevered cost of capital?

• A) 9.00%
• B) 11.35%
• C) 12.12%
• D) 12.76%
• E) 12.99%

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Definitions:

Tube-feeding Set

A collection of supplies and equipment used to deliver liquid nutrition directly into the stomach or intestine through a tube, for patients who are unable to eat by mouth.

Clear Carbonated Soda

A transparent, bubbly drink that contains carbon dioxide, water, and often flavored syrups.

Anorexia Nervosa

A disease characterized by a prolonged inability or refusal to eat, rapid weight loss, and emaciation in persons who continue to believe they are fat.

Enteral Feeding Tube

A medical device used to provide nutrition to people who cannot obtain nutrition by mouth, are unable to swallow safely, or need nutritional supplementation.