Kokapeli,Inc

question 79

Multiple Choice

Kokapeli,Inc.has a target capital structure of 40% debt and 60% common equity,and has a 40% marginal tax rate.If the firm's yield to maturity on bonds is 7.5% and investors require a 15% return on the firm's common stock,what is the firm's weighted average cost of capital?

• A) 7.20%
• B) 10.80%
• C) 12.00%
• D) 12.25%

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Definitions:

Tensor Fasciae Latae

A muscle of the thigh that helps in stabilizing and moving the hip and knee.

Abducts

The movement of a limb or other part away from the midline of the body or from another part.

Flexes Thigh

The action performed by certain muscles to decrease the angle between the torso and the thigh.

Lateral Compartment

An area or division, often in reference to the sections of limbs that are situated on the outer side.