Ghan Rail Corporation,whose Tax Rate Is 40%,has Two Sources of Funds

question 96

Multiple Choice

Ghan Rail Corporation,whose tax rate is 40%,has two sources of funds: long-term debt with a market
Value of $8 000 000 and an interest rate of 8%,and equity capital with a market value of $12 000 000 and a cost of equity of 12%.What is Ghan Rail's weighted-average cost of capital (WACC) ?

• A).0480
• B).1000
• C).0912
• D).0800

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