If the Cost of Debt Is 5%, the Cost of Equity

question 6

Multiple Choice

If the cost of debt is 5%, the cost of equity is 10%, and 70% of assets are financed by equity, the weighted average cost of capital is

• A) 5.0%
• B) 7.5%
• C) 8.5%
• D) 10.0%
• E) None of the above

---

Definitions:

Spinal Cord

The long, thin, tubular structure made up of nervous tissue, which extends from the medulla oblongata in the brainstem to the lumbar region of the vertebral column, acting as the primary pathway for information connecting the brain and peripheral nervous system.

Parasympathetic

Part of the autonomic nervous system responsible for conserving energy and promoting restful states by slowing the heart rate and increasing intestinal and gland activity.

Somatic Nervous System

The part of the peripheral nervous system associated with the voluntary control of body movements via skeletal muscles.

Peripheral Nervous System

The part of the nervous system that consists of nerves and ganglia outside of the brain and spinal cord, connecting the central nervous system to limbs and organs.