Find the Weighted Average Cost of Capital for a Firm

question 36

Multiple Choice

Find the weighted average cost of capital for a firm that has a debt-to-equity ratio of 1½, a tax rate of 34%, a levered cost of equity of 12% and a pre-tax cost of debt of 10%.

• A)9.6%
• B)7.968%
• C)8.76%
• D)none of the above

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Definitions:

Caloric Intake

The total number of calories consumed through food and beverages within a given period.

Soluble Fibre

Fibre that, as it passes through the digestive tract, breaks down and forms a gel that is thought to reduce the amount of cholesterol that is absorbed; sources include oats, legumes, some seeds, brown rice, barley, oats, fruits, some green vegetables, and potatoes.

Non-Soluble Fibre

A type of dietary fiber that does not dissolve in water, aids in digestive health by adding bulk to the stool and promoting regular bowel movements.

Lentils

Edible seeds from the legume family, known for their lens shape and used in various cuisines worldwide as a source of protein and nutrients.