Suppose That TNT, Inc

question 66

Multiple Choice

Suppose that TNT, Inc. has a capital structure of 43 percent equity, 23 percent preferred stock, and 34 percent debt. If the before-tax component costs of equity, preferred stock and debt are 15.4 percent, 10 percent and 7 percent, respectively, what is TNT's WACC if the firm faces an average tax rate of 28 percent?

• A)9.45 percent
• B)10.64 percent
• C)10.80 percent
• D)11.30 percent

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Definitions:

Discontinuity

A lack of continuity, sequence, or coherent connection in a process or phenomenon.

Participant Attrition

The loss of participants over the course of a study, which can affect the validity and reliability of the research findings.

Longitudinal

refers to research or observational studies that follow the same subjects over a period of time, noting changes and developments.

Sequential Designs

A research method in which participants are studied or tested over a period of time at different stages or points.