The Tee Company Has Total Assets of $20,000 and Total

question 34

Multiple Choice

The Tee Company has total assets of $20,000 and total debt of $8,000. The yield-to-maturity on its bonds is 9%. The cost of capital with no debt is 15%. The tax rate is 34%. What is the WACC?

• A) 8.64%
• B) 10.58%
• C) 10.88%
• D) 11.39%
• E) 12.96%

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Definitions:

Pectoralis Major

A large muscle in the front of the chest that attaches to the shoulder and sternum, involved in movements of the shoulder and arm.

Deltoid

Refers to the triangular muscle on the shoulder, involved in arm movements and known for its shape.

Circular Sphincter

A circular muscle that constricts or dilates to regulate the passage of substances through an opening in the body, such as the pyloric sphincter in the digestive system.

Peristalsis

The involuntary constriction and relaxation of the muscles of the intestine or another canal, creating wavelike movements that push the contents forward.