Jemisen's Has Expected Earnings Before Interest and Taxes of $6,200

question 61

Multiple Choice

Jemisen's has expected earnings before interest and taxes of $6,200.Its unlevered cost of capital is 14 percent and its tax rate is 34 percent.The firm has debt with both a book and a face value of $2,500.This debt has a 9 percent coupon and pays interest annually.What is the firm's weighted average cost of capital?

• A)12.48 percent
• B)13.60 percent
• C)13.87 percent
• D)14.14 percent
• E)14.37 percent

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Definitions:

Behavior Modification Programs

A form of therapy that uses reinforcement or punishment to alter behavior, based on the principles of operant conditioning.

Unconscious Motivating Forces

The underlying, often unrecognized drives originating in the unconscious mind that influence an individual's actions and feelings.

Personality Theorists

Researchers or theorists who study individual differences in characteristic patterns of thinking, feeling, and behaving.

Skinner's Research

B.F. Skinner's research focused on operant conditioning, demonstrating how behavior is influenced by its consequences, leading to an increased or decreased likelihood of that behavior occurring in the future.