Calculate the After-Tax WACC Based on the Following Information:nominal Interest

question 8

Multiple Choice

Calculate the after-tax WACC based on the following information:nominal interest rate on debt = 12%; cost of common equity = 25%; common equity = $700,000; interest-bearing debt = $300,000; and a tax rate = 25%.

• A)15%
• B)16.4%
• C)20.2%
• D)22.8%
• E)30%

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