Solve for the Weighted Average Cost of Capital $13.60 \% K _ { l } =$

question 71

Multiple Choice

Solve for the weighted average cost of capital: $13.60 \% K _ { l } =$ cost of equity capital for a leveraged firm
$3 / 4 \lambda =$ debt-to-total-market-value ratio
$8.0 \% \quad i =$ before-tax borrowing cost
$40.0 \% \quad \tau =$ marginal corporate income tax rate

• A)7.00%
• B)6.89%
• C)6.73%
• D)6.67%
• E)6.57%

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