Taylor's Has a Beta of 0

question 7

Multiple Choice

Taylor's has a beta of 0.97 and a debt-to-equity ratio of 0.46.The market rate of return is 11.3 percent,the tax rate is 34 percent,and the risk-free rate is 2.2 percent.The pretax cost of debt is 6.4 percent.What is the firm's WACC?

• A)8)39%
• B)7)67%
• C)8)16%
• D)9)46%
• E)8)88%

---

Definitions:

Correlation

A numerical value indicating how much two variables vary in conjunction with each other.

Lab

Short for laboratory, a controlled environment where scientific research, experiments, and testing are conducted.

Grade

A classification system used in education to evaluate or rank students' performance, typically represented by letters (A, B, C, etc.) or numbers.

Hours

A unit of time equal to 60 minutes or 3600 seconds.