Find the Weighted Average Cost of Capital for a Firm

question 41

Multiple Choice

Find the weighted average cost of capital for a firm that has a debt-to-equity ratio of 2, a tax rate of 40%, a levered cost of equity of 12% and an after-tax cost of debt of 9%.

• A)7.6%
• B)7.968%
• C)10%
• D)none of the above

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Definitions:

Obsessive-Compulsive Disorder (OCD)

A mental disorder where individuals experience repetitive, unwanted thoughts (obsessions) and behaviors (compulsions) they feel compelled to perform.

DSM-5

The Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, a classification and diagnostic tool for mental disorders used by mental health professionals.

Anxious Disorder

A category of mental health disorders characterized by excessive fear, anxiety, and related behavioral disturbances.

Obsessive-Compulsive Disorder (OCD)

A mental health disorder characterized by repetitive, unwanted thoughts (obsessions) and irrational, excessive urges to do certain actions (compulsions).