Qantas Is Discussing New Ways to Recapitalise the Firm and Raise

question 21

Multiple Choice

Qantas is discussing new ways to recapitalise the firm and raise additional capital. Its current capital structure has a 30% weight in ordinary shares, 10% in preference shares, and 60% in debt. The cost of equity capital is 17%, the cost of preference shares is 11%, and the pre-tax cost of debt is 8%. What is the weighted average cost of capital for Qantas if its marginal tax rate is 30%?

• A)10.73%
• B)10.25%
• C)9.96%
• D)9.56%

---

Definitions:

Attitudes of Individuals

The settled ways of thinking or feeling about someone or something, typically reflected in a person's behavior.

Intellectual and Physical Work

Tasks that require mental effort and reasoning (intellectual) alongside or in comparison to tasks requiring physical exertion and labor (physical).

Explaining Behaviour

The process of analyzing and understanding the reasons behind individuals' actions and reactions.

Predicting Behaviour

The process of forecasting individuals' actions based on past actions, psychological theories, or statistical methods.