Kelso's Has a Debt-Equity Ratio of 0

question 49

Multiple Choice

Kelso's has a debt-equity ratio of 0.6 and a tax rate of 35 percent.The firm does not issue preferred stock.The cost of equity is 14.5 percent and the aftertax cost of debt is 4.8 percent.What is the weighted average cost of capital?

• A)10.46 percent
• B)10.67 percent
• C)10.86 percent
• D)11.38 percent
• E)11.57 percent

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Definitions:

Rational Emotive Behavior Therapy

Rational Emotive Behavior Therapy is a type of psychotherapy that helps individuals identify self-defeating thoughts and feelings, challenge the rationality of those feelings, and replace them with healthier, more productive beliefs.

Directive Role

A leadership or guidance style where decisions and directions are provided explicitly by the leader or authority.

Cognitive-Behavioral

Referring to a psychotherapeutic approach that addresses dysfunctional emotions, behaviors, and cognitions through a goal-oriented, systematic procedure.

Short-Term

pertaining to or lasting for only a limited period of time; often contrasted with long-term.