Using the WACC in Practice: Swirlpool, Inc

question 29

Multiple Choice

Using the WACC in practice: Swirlpool, Inc., has found that its cost of common equity capital is 18 percent, and its cost of debt capital is 8 percent. If the firm is financed with 60 percent common shares and 40 percent debt, then what is the after-tax weighted average cost of capital for Swirlpool if it is subject to a 40 percent marginal tax rate?

• A) 10.37%
• B) 12.00%
• C) 12.72%
• D) 14.00%

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Definitions:

Communications Department

A division within an organization that manages internal and external communication, including PR, media relations, and employee communication.

PR Activities

Tasks and initiatives undertaken to manage and influence public perception and maintain a favorable image of an organization or individual.

Public Communications Office

A department within an organization responsible for managing and disseminating information to the public and media, ensuring clear and effective communication of the organization's messages.

Membership Growth

An increase in the number of individuals who join and become part of an organization or group.