Plasti-Tech Inc

question 42

Multiple Choice

Plasti-tech Inc.is financed 60% with equity and 40% with debt.Currently,its debt has a pretax interest rate of 12%.Plasti-tech's common stock trades at $15.00 per share and its most recent dividend was $1.00.Future dividends are expected grow by 4%.If the tax rate is 34%,what is Plasti-tech's WACC?

• A) 7.39%
• B) 9.57%
• C) 9.73%
• D) 11.20%

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Definitions:

Fixed-Ratio

In the context of behavioral psychology, a reinforcement schedule that rewards a response only after a specified number of responses.

Variable-Ratio

A reinforcement schedule in operant conditioning where a response is reinforced after an unpredictable number of responses.

Fixed-Interval

A schedule of reinforcement where the first response is rewarded only after a specified amount of time has elapsed.

Variable-Interval

A schedule of reinforcement where a response is rewarded after an unpredictable amount of time has passed.