Suppose That TipsNToes, Inc

question 25

Multiple Choice

Suppose that TipsNToes, Inc.'s capital structure features 40 percent equity, 60 percent debt, and that its before-tax cost of debt is 9 percent, while its cost of equity is 15 percent. If the appropriate weighted average tax rate is 34 percent, what will be TipsNToes' WACC?

• A) 9.36%
• B) 9.56%
• C) 11.40%
• D) 24.00%

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