A Firm Has Debt of $7,000,equity of $12,000,a Leveraged Value

question 69

Multiple Choice

A firm has debt of $7,000,equity of $12,000,a leveraged value of $8,900,a cost of debt of 7%,a cost of equity of 14%,and a tax rate of 30%. What is the firm's weighted average cost of capital?

• A) 8.45%
• B) 9.90%
• C) 10.65%
• D) 12.50%
• E) 14.00%

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Definitions:

Short-Term Employment

Employment situations that are temporary or have a fixed duration, often lasting for only a limited period.

Gig Employment

refers to a labor market characterized by short-term contracts or freelance work, as opposed to permanent jobs, often facilitated by digital platforms.

Human Capital

The neoliberal idea that each person possesses a set of skills, knowledge, and abilities that he or she is responsible for maintaining and improving so that he or she accumulates more capital (and hence accrues more market value).

Commercial Project

A project undertaken for commercial purposes, focusing on the development and delivery of goods or services for profit.