A Firm Requires an Investment of $30,000 and Borrows $15,000

question 91

Multiple Choice

A firm requires an investment of $30,000 and borrows $15,000 at 6%.If the cost of equity is 18%,and the firm's WACC is 10.8%,what is the firm's tax rate?

• A)40%
• B)35%
• C)30%
• D)45%
• E)50%

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Definitions:

Food

Any nutritious substance that people or animals eat or drink to maintain life and growth.

Fat

A natural oily or greasy substance occurring in animal bodies, especially when deposited as a layer under the skin or around certain organs.

Calories

A unit of energy used to measure the amount of energy contained in food and drink and the energy expended during physical activity.

Gram

A metric unit of mass equal to one thousandth of a kilogram, commonly used to measure small quantities of substances.