Solve for the Weighted Average Cost of Capital $11.80 \% K _ { l } =$

question 49

Multiple Choice

Solve for the weighted average cost of capital: $11.80 \% K _ { l } =$ cost of equity capital for a leveraged firm
$3 / 5 \lambda =$ debt-to-total-market-value ratio
$8.0 \% \quad i =$ before-tax borrowing cost
$40.0 \% \quad \tau =$ marginal corporate income tax rate

• A)8.67%
• B)8.00%
• C)7.60%
• D)7.33%
• E)7.14%

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Definitions:

Stimulus

A stimulus is anything in the environment that one can respond to.

Behavior

The range of actions and mannerisms made by individuals, organisms, systems, or artificial entities in conjunction with themselves or their environment.

Frequency

The rate at which a vibration occurs that constitutes a wave, either in a material (as in sound waves), or in an electromagnetic field (as in radio waves and light).

B.F. Skinner

An influential American psychologist known for his work in behaviorism, particularly the development of the theory of operant conditioning.