XYZ Industries Has 10 Million Shares of Stock Outstanding Selling

question 5

Multiple Choice

XYZ Industries has 10 million shares of stock outstanding selling at $10 per share and an issue of $30 million in 8.5 percent, annual coupon bonds with a maturity of 25 years, selling at 102 percent of par ($1000) . If XYZ's weighted average tax rate is 40 percent and its cost of equity is 15 percent, what is XYZ's WACC?

• A) 8.06%
• B) 11.75%
• C) 12.65%
• D) 13.43%

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Definitions:

Person-To-Person Sales

A direct sales method where products are sold by individuals directly to consumers, often in a face-to-face manner, outside of a retail environment.

Online Retailers

are businesses that sell goods or services to consumers over the internet, often through a website or app, without a traditional physical storefront.

Credit Card Information

Details pertaining to a credit card, including the card number, expiry date, and CVV, essential for executing financial transactions.

Direct Selling

A retail channel where products are marketed and sold directly to consumers, bypassing traditional retail stores.