Zonk Corp
the Following Data Pertains to Zonk Corp -Determine the Weight on Equity Capital That Should Be Used

question 15

Multiple Choice

Zonk Corp.
The following data pertains to Zonk Corp., a manufacturer of ball bearings (dollar amounts in millions) :
$\begin{array}{l}\begin{array} { l } \text { Tatal assets } \\\text { Interest-bearing debt } \\\text { Average pre-tax borrowring } \\\text { Cammon equity: } \\\text { Badk value } \\\text { Market value } \\\text { Incame tax rate } \\\text { Market equity beta }\end{array}\begin{array} { r } \$ 7460\\\$ 3652\\10.5 \%\\\\\$2950 \\\$13685 \\35\% \\1.13\end{array}\end{array}$
-Determine the weight on equity capital that should be used to calculate Zonk's weighted-average cost of capital:

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Definitions:

Payroll Tax

A tax imposed on employers and employees, calculated as a percentage of the wages that employers pay their staff.

Federal Receipts

Revenue collected by the federal government, generally through taxes and fees.

Marginal Tax Rate

The Marginal Tax Rate is the tax rate applied to an individual's or corporation's last dollar of income, showing the fraction of additional income that is paid in tax.

Average Tax Rate

The average tax rate is the percentage of total income that an individual or corporation pays in taxes, calculated by dividing total tax paid by total income.