Given the Following Information, What Is JEM Inc

question 324

Multiple Choice

Given the following information, what is JEM Inc.'s weighted average cost of capital? Market value of equity = $50 million; market value of debt = $30 million; cost of equity = 16%; cost of debt = 8%;
Equity beta = 1.25; tax rate = 34%.

• A) 11.98%
• B) 11.45%
• C) 11.29%
• D) 12.32%
• E) 13.00%

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