Wild Ducks Unlimited Wants to Have a Weighted Average Cost

question 214

Multiple Choice

Wild Ducks Unlimited wants to have a weighted average cost of capital of 8.5 percent. The firm has an after-tax cost of debt of 4.6 percent and a cost of equity of 12 percent. What debt-equity ratio is
Needed for the firm to achieve the targeted weighted average cost of capital?

• A) .66
• B) .72
• C) .77
• D) .84
• E) .90

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Definitions:

Disclaim Warranties

A statement made by a seller that specifies they are not providing guarantees about the condition or quality of goods being sold.

UCC

The Uniform Commercial Code, a comprehensive set of statutes designed to provide uniformity and predictability in commercial transactions across the United States.

Promissory Estoppel

A legal principle that prevents a party from withdrawing a promise made when the other party has reasonably relied on that promise to their detriment.

Consideration

A fundamental component in contract law, referring to something of value that is exchanged between parties as part of an agreement.