Use the Information for the Question(s)below

question 10

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 .5 debt to equity ratio,then Flagstaff's pre-tax WACC is closest to:

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

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Definitions:

Lines of Magnetic Flux

Imaginary lines representing the strength and direction of a magnetic field, where the density of lines indicates the field's intensity.

Synchronous Speed

The speed at which the magnetic field in an AC motor rotates, dependent on the frequency of the supply current and the number of poles in the motor.

Turning Torque

The torque required to initiate rotation of a body from rest or to maintain rotation at a constant angular velocity.

Maximum Positive Voltage

The highest voltage level in the positive direction that a system or component is designed to handle.