Use the Information for the Question(s)below

question 13

Multiple Choice

Use the information for the question(s) below.
Flagstaff Enterprises expected to have free cash flow in the coming year of $8 million,and this free cash flow is expected to grow at a rate of 3% per year thereafter.Flagstaff has an equity cost of capital of 13%,a debt cost of capital of 7%,and it has a 35% corporate tax rate.
-If Flagstaff maintains a debt to equity ratio of 1,then Flagstaff's pre-tax WACC is closest to:

• A)11.0%.
• B)10.5%.
• C)10.0%.
• D)9.0%.

---

Definitions:

Variable Interval

A schedule of reinforcement where a response is rewarded after an unpredictable amount of time has passed, used in behavioral psychology studies.

Schedule of Reinforcement

In behavior analysis, the strategy used in reinforcing behavior, which includes various methodologies like fixed-ratio, variable-ratio, fixed-interval, and variable-interval schedules.

Fixed Ratio

A schedule of reinforcement where a response is reinforced only after a specified number of responses, commonly used in behavior modification.

Employee Volunteerism

The act of employees volunteering their time and skills for community service projects or charitable causes, often supported or encouraged by their employer.