Pacifica Inc

question 83

Multiple Choice

Pacifica Inc.is an import-export company specializing in products from Canada,Australia,and the West Coast.It can borrow in the debt market at 6%.Its cost of equity with 30% D/V ratio is 11%.Its corporate tax rate is 25%.If the M&M world of taxes holds true,what is the WACC for the firm with a 30% D/V financing?

• A)7.90%
• B)8.75%
• C)9.05%
• D)9.44%

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Definitions:

Salem Sump Tube

A double-lumen nasogastric tube used for decompression, which allows for the removal of gastric contents and the introduction of air to prevent vacuum formation.

Levin Tube

A type of single-lumen nasogastric tube commonly used for gastric decompression or the removal of gastric contents.

Stomach Decompression

A medical procedure that involves the removal of stomach contents to relieve pressure or bloating.

Laxative Use

The consumption or usage of substances that loosen stools and increase bowel movements to alleviate constipation.