If KT Expects to Maintain a Debt to Equity Ratio

question 48

Multiple Choice

If KT expects to maintain a debt to equity ratio for this project of .6 then KT's project based WACC,r_wacc,for this project is closest to:

• A)10.5%
• B)11.1%
• C)9.6%
• D)10.8%

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Definitions:

Compounded Monthly

An interest calculation method where interest is added to the principal balance on a monthly basis, with each month's interest calculation based on the principal plus all previously compounded interest.

Insurance Premium

The amount of money an individual or business must pay for an insurance policy.

Face Value

(1) The amount paid at maturity of a Treasury bill or commercial paper. (2) The initial principal amount of a mortgage.

Market Value

The current price at which an asset or service can be bought or sold in the marketplace.