Suppose Simmons' Common Stock Has a Beta of 1

question 70

Multiple Choice

Suppose Simmons' common stock has a beta of 1.37,the risk-free rate is 3.4 percent,and the market risk premium is 8.2 percent.The yield to maturity on the firm's bonds is 7.6 percent and the debt-equity ratio is .45.What is the WACC if the tax rate is 23 percent and all interest is tax deductible?

• A)14.07 percent
• B)10.94 percent
• C)12.60 percent
• D)10.59 percent
• E)11.91 percent

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Definitions:

Cohabitation

Couples living together without being married.

Alternative

Referring to one or more options or choices apart from the conventional or usual.

True Intimacy

Deeply personal and close relationship characterized by mutual affection, understanding, and trust.

Adolescence

The phase of growth both mentally and physically that typically happens from puberty until reaching the age of majority.