Calculate a Firm's WACC Given That the Total Value of the Firm

question 56

Multiple Choice

Calculate a firm's WACC given that the total value of the firm is $2 million,$600,000 of which is debt,the pre-tax cost of debt is 10%,and the cost of equity is 15%.The firm pays no taxes.

• A) 9.0%
• B) 11.5%
• C) 13.5%
• D) 14.4%

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