Phil's Carvings, Inc

question 13

Multiple Choice

Phil's Carvings, Inc. wants to have a weighted average cost of capital of 9%. The firm has an after-tax cost of debt of 5% and a cost of equity of 11%. What debt-equity ratio is needed for the firm to achieve its targeted weighted average cost of capital?

• A) 0.33
• B) 0.40
• C) 0.50
• D) 0.60
• E) 0.67

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Definitions:

UV-visible Spectrum

A graphical representation of the absorption or emission of ultraviolet or visible radiation by a substance, used to characterize and analyze chemical substances.

Energy Absorption

The process by which a material takes in energy from its surroundings, often leading to physical or chemical changes.

(E)-1,3,5-hexatriene

A linear conjugated hydrocarbon with the formula C6H8, characterized by a specific geometric configuration (E) of its carbon-carbon double bonds.

Conjugated System

A chemical structure where alternating single and multiple bonds create a system of connected π-electrons, leading to unique stability and reactivity.