Given an Optimal Capital Structure That Is 50% Debt and 50

question 11

Multiple Choice

Given an optimal capital structure that is 50% debt and 50% common stock, calculate the weighted average cost of capital for the company given the following additional information:
$\begin{array}{lc}\text { Bond coupon rate } & 8 \% \\\text { Bond yield to maturity } & 5 \% \\\text { Dividend, expected } & \$ 5 \\\text { Price, common } & \$ 80 \\\text { Growth rate } & 5 \% \\\text { Corporate tax rate } & 21 \%\end{array}$

• A) Less than 6%.
• B) More than 6% and less than 7%.
• C) More than 7% and less than 8%.
• D) More than 8%.

---

Definitions:

Conflict Theories

A perspective in sociology that sees social life as a competition, with individuals and groups struggling over resources, power, and socioeconomic status.

Media Effects

Refers to the influence that media can have on viewers' thoughts, feelings, and behaviors.

Numerical Underrepresentation

A situation where a particular group has fewer members or representatives in a given context or area than would be expected based on their proportion in the general population.

Biased Portrayal

Refers to the representation of events, people, or places in a partial or prejudiced manner, often leading to misleading perceptions.