The Five and Dime Store Has a Cost of Equity

question 92

Multiple Choice

The Five and Dime Store has a cost of equity of 14.8 percent, a pretax cost of debt of 6.7 percent, and a tax rate of 34 percent.What is the firm's weighted average cost of capital if the debt-equity ratio is .46?

• A)10.18 percent
• B)11.72 percent
• C)11.53 percent
• D)13.49 percent
• E)14.93 percent

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