Suppose That TNT, Inc

question 45

Multiple Choice

Suppose that TNT, Inc. has a capital structure of 43 percent equity, 23 percent preferred stock, and 34 percent debt. If the before-tax component costs of equity, preferred stock and debt are 15.4 percent, 10 percent and 7 percent, respectively, what is TNT's WACC if the firm faces an average tax rate of 28%?

• A) 9.45%
• B) 10.64%
• C) 10.80%
• D) 11.30%

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Definitions:

Latin

A classical language originating from the Roman Empire, now primarily used in scholarly and ecclesiastical contexts.

Plaintiff

The party who initiates a lawsuit in a court of law against another party (the defendant) to obtain a remedy or damages.

Lawsuit

A legal action or proceeding between two parties, plaintiff and defendant, conducted in a court of law.

Court Determination

The final decision or judgment issued by a court of law.