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

question 3

Multiple Choice

A firm requires an investment of $30,000 and borrows $15,000 at 7%. If the return on equity is 19%, what is the firm's pretax WACC?

• A) 13%
• B) 6.5%
• C) 15.6%
• D) 18.2%

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Definitions:

PhMgCl

Phenylmagnesium chloride, a Grignard reagent used in organic synthesis to form carbon-carbon bonds.

Mechanism

Describes the step-by-step process by which reactants are converted into products in a chemical reaction.

Grignard Reagent

An organomagnesium compound used in chemistry for creating new carbon-carbon bonds.

Alkyl Halides

Organic compounds containing a halogen atom(X) bonded to an sp3-hybridized carbon atom, used in many chemical reactions and synthesis.