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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