XYZ Industries Has 10 Million Shares of Stock Outstanding Selling

question 119

Multiple Choice

XYZ Industries has 10 million shares of stock outstanding selling at $10 per share and an issue of $30 million in 8.5 percent, annual coupon bonds with a maturity of 25 years, selling at 102 percent of par ($1,000) . If XYZ's weighted average tax rate is 40 percent and its cost of equity is 15 percent, what is XYZ's WACC?

• A)8.06 percent
• B)11.75 percent
• C)12.65 percent
• D)13.43 percent

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