The Weighted-Average Cost of Capital for a Firm with a 40/60

question 84

Multiple Choice

The weighted-average cost of capital for a firm with a 40/60 debt/equity split,8% cost of debt,15% cost of equity,and a 34% tax rate is:

• A) 12.20%.
• B) 8.63%.
• C) 11.11%.
• D) 13.80%.

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Definitions:

Community

A group of people living in the same place or having a particular characteristic in common, or the feeling of fellowship with others due to shared attitudes, interests, and goals.

Moderate Temperatures

Climatic conditions that are not too extreme, either hot or cold, often considered comfortable for human beings.

Economic Concept

A theory or principle that forms the basis of economic reasoning and decision making.

Corn

A cereal plant that yields large grains, or kernels, set in rows on a cob, widely grown for food, feed, and as a raw material for various products.