Calculate a Firm's WACC Given That the Total Value of the Firm

question 23

Multiple Choice

Calculate a firm's WACC given that the total value of the firm is $2,000,000,$600,000 of which is debt,the cost of debt and equity is 10% and 15%,respectively,and the firm pays no taxes.

• A) 9.0%
• B) 11.5%
• C) 13.5%
• D) 14.4%

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Definitions:

Stratified

Categorized into different levels or layers, especially in a hierarchical order.

Collective

Pertaining to or involving a group of individuals acting as a whole.

Self-Efficacy

The belief in one's capabilities to organize and execute the courses of action required to manage prospective situations.

Strength-Training

A form of physical exercise specializing in the use of resistance to induce muscular contraction, which builds strength and anaerobic endurance.