Able Company's Shareholders Are Receiving a 22

question 1

Multiple Choice

Able Company's shareholders are receiving a 22.5%return and its bondholders get a 14% return. Based on a 50 percent debt/equity ratio, with no preferred stock and a 46 percent tax rate, find Able's weighted average cost of capital.

• A)12.54 percent
• B)14.47 percent
• C)15.03 percent
• D)17.52 percent

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Definitions:

Lamellated Corpuscle

A type of sensory receptor found in the skin and mucous membranes that detects pressure and vibration.

20/100 Vision

A measure of visual acuity that indicates a person sees at 20 feet what a person with normal vision can see at 100 feet.

Feet

The lower extremity of the leg below the ankle, on which a person stands or walks.

Proprioceptors

Sensory receptors found in muscles, tendons, and joints, providing a sense of body position and movement.