With a Tax Rate of 35%, Calculate the WACC for a Firm

question 109

Multiple Choice

With a tax rate of 35%, calculate the WACC for a firm that pays 10% on its debt, requires an 18% rate of return on its equity, and finances 45% of assets with debt.

• A)12.83%
• B)14.00%
• C)14.40%
• D)18.20% WACC =
• = )65(.10)(.45) + .18(.55)
• = )0293 + .099

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