Using the WACC in Practice: Maloney's, Ltd

question 37

Multiple Choice

Using the WACC in practice: Maloney's, Ltd., has found that its cost of equity capital is 17 percent and its cost of debt capital is 6 percent. If the company is financed with $3,000,000 of ordinary shares (market value) and $2,000,000 of debt, then what is the after-tax weighted average cost of capital for Maloney's if it is subject to a 40 percent company tax rate?

• A) 8.96%
• B) 11.16%
• C) 11.64%
• D) 12.60%

---

Definitions:

Empathy

The ability to understand and share the feelings of another, allowing for deeper connections and compassion towards others.

Feel

Experience or become aware of (an emotion or sensation).

Conformity

involves adjusting one's behavior or thinking to align with group norms or expectations, often due to real or imagined social pressure.

Obedience

The act of following orders or directives from authority figures, often studied in social psychology to understand the extent and limits of social influence.