Calculate the Weighted Average Cost of Capital (WACC)based on the Following

question 73

Multiple Choice

Calculate the weighted average cost of capital (WACC) based on the following information: the equity multiplier is 1.66; the interest rate on debt is 13%; the required return to equity holders is 22%; and the tax rate is 35%.

• A)11.5%
• B)13.9%
• C)15.0%
• D)16.6%

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Definitions:

Attribution Theory

A theory that focuses on how individuals interpret events and how this relates to their thinking and behavior.

Situational Factors

External influences that can affect an individual's behavior and decisions in a given context.

Dispositional Factors

Internal characteristics or attributes of individuals that influence their behavior and attitudes.

Self-serving Bias

A cognitive bias that leads individuals to attribute their successes to internal factors and their failures to external factors.