A Firm Requires an Investment of $30,000 and Borrows $10,000

question 38

Multiple Choice

A firm requires an investment of $30,000 and borrows $10,000 at 6%.If the return on equity is 15%,what is the firm's pre tax WACC?

• A)14%
• B)13%
• C)12%
• D)11%

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Definitions:

Sulfur Atom

A chemical element with the atomic number 16, known for its yellow color and presence in many essential biochemicals and minerals.

Cyclopentadienyl Cation

A highly reactive, positively charged intermediate featuring a five-membered ring with two double bonds.

π Network

A system of conjugated pi bonds found in certain organic molecules, contributing to the stability and color properties of the molecule.

Cyclopropenyl Cation

A highly reactive ion with a three-membered ring structure and a positive charge.