Rogue Drafting Has Debt with a Market Value of $450,000,preferred

question 11

Multiple Choice

Rogue Drafting has debt with a market value of $450,000,preferred stock with a market value of $150,000,and common stock with a market value of $350,000.If debt has a cost of 8%,preferred stock a cost of 10%,common stock a cost of 12%,and the firm has a tax rate of 30%,what is the WACC?

• A)8.65%
• B)9.12%
• C)9.33%
• D)9.46%

---

Definitions:

Rectangle

A four-sided polygon with opposite sides being equal and parallel, and all interior angles being right angles.

Fear of Heights

A phobia characterized by an excessive and irrational fear of high places.

Visual Cliff

An experiment designed to assess perception of depth and fear of falling in infants.

Crawling

A form of locomotion seen in infants as they start to move on their hands and knees before walking, critical for developmental milestones.