Tardy Clocks Inc

question 39

Multiple Choice

Tardy Clocks Inc.(TC) has long term bonds with a face value of $6M,the coupon rate on the bonds is 6% and the yield on the bonds is also 6%.The unlevered cost of equity is 10% and the value of TC's equity is $9.1M.The corporate tax rate is 35%.What is Tardy's WACC?

• A) 6.42%
• B) 7.89%
• C) 8.61%
• D) 9.44%
• E) 11.71%

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Definitions:

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The process of setting goals and defining the steps needed to achieve them within an organization.

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A strategy that arises in the absence of an intentional course of action, developing through patterns in the organization's decisions over time.

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General instructions or principles that provide direction to action or behavior.

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