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

question 76

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%
• E)10.5%

---

Definitions:

Holter Monitor

A device that attaches electrodes to a patient’s chest for the purpose of obtaining a 24-hour ECG tracing in an accessory tape recorder.

ECG Electrodes

Small, adhesive patches used during an electrocardiogram (ECG) to detect electrical activity of the heart and record it.

Chest Wall

The structure comprising the ribs, sternum, and spine that encloses and protects the thoracic cavity and its contents.

Routine Annual Physical Examination

A yearly health checkup that includes a general physical exam and various tests to assess an individual's health.