A Firm Has a Total Market Value of $10 Million

question 4

Multiple Choice

A firm has a total market value of $10 million while its debt has a market value of $4 million.What is the after-tax weighted average cost of capital if the before-tax cost of debt is 10%,the cost of equity is 15%,and the tax rate is 35%?

• A)13.0%
• B)11.6%
• C)8.8%
• D)10.4%

---

Definitions:

Intentions

Plans or objectives that a person means to carry out, indicating purpose or aim.

Growth Pattern

Refers to the specific way in which an individual's physical growth occurs over time, including changes in height, weight, and body proportions.

Percentile

A statistical value indicating the relative standing of a value within a dataset, showing what percentage of the data falls below that value.

Universal Importance

Significance or relevance that is recognized or applicable globally, across different cultures and societies.