Rogers' Rotors Has Debt with a Market Value of $250,000,preferred

question 58

Multiple Choice

Rogers' Rotors has debt with a market value of $250,000,preferred stock with a market value of $50,000,and common stock with a market value of $750,000.If debt has a cost of 7%,preferred stock a cost of 9%,common stock a cost of 13%,and the firm has a tax rate of 30%,what is the WACC?

• A)8.64%
• B)9.12%
• C)9.33%
• D)10.88%

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Definitions:

Misinterpret

To understand or interpret incorrectly, leading to a deviation from the intended meaning or message.

Neutral Behavior

Actions or responses that are neither particularly positive nor negative, often indicating a state of impartiality.

Competitive

A state or attitude involving rivalry, where individuals or groups strive to achieve a goal that cannot be shared or where achieving the goal by one means others do not.

Bilateral Threats

Situations or scenarios where two parties or nations pose mutual threats to each other's security or interests.