Wildlife Co

question 43

Multiple Choice

Wildlife Co.reported net income of $8.3 million,interest expense of $.5 million and they are in a 30% tax rate bracket.Their average total assets are $65.8 million and average stockholders' equity is $48.6 million.What is Wildlife's financial leverage percentage?

• A)3.7%
• B)4.5%
• C)4.0%
• D)4.7%

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Definitions:

Coupon Rate

The interest rate that a bond issuer will pay to the bondholder on the face value of the bond.

Market Price

The live market price at which an asset or service can be bought or sold.

Weighted Average Cost of Capital (WACC)

A calculation of a company's cost of capital, weighted by the proportion of each source of capital (debt and equity), used to see how much interest the company pays for every dollar it finances.