The UpTowner Has a Beta of 1

question 67

Multiple Choice

The UpTowner has a beta of 1.18,a debt-to-equity ratio of 0.36,and a cost of equity of 11.74 percent.The market rate of return is 10.4 percent,and the tax rate is 35 percent.If the pretax cost of debt is 6.9 percent,what is the company's WACC?

• A)9.82%
• B)8.90%
• C)10.41%
• D)9.96%
• E)10.12%

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