What Is Ningbo Shipping's WACC If It's After Tax Cost

question 100

Multiple Choice

What is Ningbo Shipping's WACC if it's after tax cost of debt is 3.5%,it's cost of retained earnings is 14%,and the firm's market value of debt is $40 million while the market value of its equity is $60 million?

• A)1.8%.
• B)3.5%.
• C)11.8%.
• D)14.7%.
• E)none of the above.

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Definitions:

Extraneous Variable

Any variable in a scientific experiment that is not the independent or dependent variable but may affect the results of the experiment if not properly controlled.

Random Assignment

A method used in experiments where participants are allocated to different groups purely by chance, minimizing pre-existing differences between those groups.

Experimental Groups

In research, groups of participants that are exposed to the independent variable or treatment of interest, to assess its effect on various outcomes.

Equal Probability

A statistical condition where all outcomes have the same chance or likelihood of occurring.