Suppose That T-Shirts, Inc

question 88

Multiple Choice

Suppose that T-shirts, Inc.'s capital structure features 25 percent equity, 75 percent debt, and that its before-tax cost of debt is 8 percent, while its cost of equity is 12 percent. If the appropriate weighted average tax rate is 30 percent, what will be T-shirts' WACC?

• A)9.00 percent
• B)7.20 percent
• C)5.10 percent
• D)4.75 percent

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Definitions:

Verbal Message

Information conveyed through spoken words, as opposed to written or nonverbal means, in face-to-face or digital communication.

Nonverbal Messages

Communication conveyed through body language, facial expressions, and other physical gestures instead of verbal language.

Listening Ability

The skill of effectively receiving, interpreting, and responding to verbal communication.

Unspoken

Communication or agreements not expressed in words but understood tacitly.