A Firm Has 1,200,000 Shares of Stock Outstanding with a Price

question 19

Multiple Choice

A firm has 1,200,000 shares of stock outstanding with a price per share equal to $14.There are 10,000 bonds outstanding,priced at $1,125 each.The cost of equity is 14 percent,the cost of debt is 8 percent,and the corporate tax rate is 40 percent.What is the WACC?

• A)10.3 percent.
• B)10.8 percent.
• C)9.8 percent.
• D)8.8 percent.

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Definitions:

Forecasting

The process of making predictions based on past and present data and analyzing trends to guide future decision-making.

Hierarchy of Effects

A concept in marketing and advertising that outlines the steps a consumer goes through, from first becoming aware of a product to making the purchase decision.

Interest Stage

A phase in the consumer buying process where potential customers develop an interest in a product or service after becoming aware of it.

Consumer's Desire

The willingness or eagerness of consumers to purchase goods or services based on their needs or wants.