The Yield-To-Maturity of a Firm's Bond Is 8

question 62

Multiple Choice

The yield-to-maturity of a firm's bond is 8.5%. The firm has a beta of 1.3 and a tax rate of 34%. The market risk premium is 8.4% and the risk-free rate is 3.8%. What is the firm's WACC if the firm has a capital structure that is 40% debt financed?

• A) 10.74%
• B) 11.08%
• C) 11.61%
• D)11.38%

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Definitions:

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