You Were Hired as a Consultant to Quigley Company,whose Target

question 68

Multiple Choice

You were hired as a consultant to Quigley Company,whose target capital structure is 40% debt,10% preferred,and 50% common equity.The interest rate on new debt is 6.50%,the yield on the preferred is 6.00%,the cost of retained earnings is 12.25%,and the tax rate is 40%.The firm will not be issuing any new stock.What is Quigley's WACC?

• A)8.29%
• B)8.62%
• C)9.32%
• D)9.69%

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Definitions:

Optimistic Belief

The tendency to hold a positive outlook towards the future or the expectation of good outcomes.

Identity Exploration

The process of examining, questioning, and evaluating one's own identity, values, beliefs, and place within the world.

Self-focus

The practice of turning one's attention inward towards one's own thoughts, feelings, and experiences, often leading to increased self-awareness.

Placenta

A membrane that permits the exchange of nutrients and waste products between the mother and her developing child but does not allow the maternal and fetal bloodstreams to mix.