The Lever Crowbar Company Has a Target Capital Structure of 70

question 169

Multiple Choice

The Lever Crowbar Company has a target capital structure of 70 percent debt and 30 percent equity with no preferred stock.  The firm doesn't plan to raise equity capital beyond next year's retained which have a cost of 15%.  Debt costs the company 8 percent before taxes of 40%. What is Lever's weighted average cost of capital.

• A)4.50%
• B)14.0%
• C)7.60%
• D)7.86%

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Definitions:

Memory and Reasoning

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Older Adults

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The phenomenon where an individual's or group's abilities or potential are judged or valued lower than their actual capabilities.

Time of Research

Refers to the specific period during which scientific research is conducted.