What Is the WACC for a Firm Using 55% Equity

question 34

Multiple Choice

What is the WACC for a firm using 55% equity with a required return of 15%, 35% debt with a required return of 8%, 10% preferred stock with a required return of 10%, and a tax rate of 35%?

• A) 10.72%
• B) 11.07%
• C) 11.70%
• D)12.05%

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Definitions:

Farming

The practice of cultivating the land and raising livestock to produce food and other agricultural products.

Gold

A yellow precious metal used for coinage, jewelry, and other arts, also valued as a financial investment.

Feme Sole

A legal term from English law referring to a single woman, including those who were widowed or divorced, who had legal rights to own property and conduct business in her own name.