Calculate the After-Tax WACC Based on the Following Information: Nominal

question 43

Multiple Choice

Calculate the after-tax WACC based on the following information: nominal interest rate on debt = 16%; cost of common equity = 30%; equity to value = 60%; debt to value = 40%; and tax rate = 25%.

• A)10.0%
• B)16.0%
• C)19.8%
• D)22.8%

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Definitions:

Personal Power

An individual's ability to influence or control the outcome of events, based on personal skills or attributes.

Position Power

The authority and influence bestowed upon an individual by virtue of their status or position within an organization.

Legitimate Power

A form of authority that stems from a formal position or role within an organization, granting the power to influence or control others.

Reward Power

A form of power that derives from the ability to offer something desirable as a means of influencing others' behavior.