The Company Cost of Capital, After Tax, for a Firm

question 74

Multiple Choice

The company cost of capital, after tax, for a firm with a 60/40 debt/equity split, 8% cost of debt, 15% cost of equity, and a 35% tax rate would be:

• A)7.02%
• B)9.12%
• C)10.80%
• D)13.80%

---

Definitions:

Hierarchy Of Needs

A theory proposed by Abraham Maslow suggesting that human needs are arranged in a hierarchical order, with basic physical needs at the bottom and self-actualization at the top.

Growth Needs

Higher level psychological needs for personal development, self-fulfillment, and realizing one's potential, often associated with Maslow's hierarchy of needs.

Need Hierarchy

A rephrased definition of Maslow's Hierarchy, emphasizing the organization of human needs into levels, with foundational necessities being addressed before higher, psychological, and self-fulfillment needs.

Lower Needs

In Maslow's hierarchy, these are the fundamental physiological and safety needs that are essential for survival, such as food, water, and shelter.