Question
20. A firm has a total value of $500,000 and debt valued at $300,000. What is the weighted average cost of capital if the after
20. A firm has a total value of $500,000 and debt valued at $300,000. What is the weighted average cost of capital if the after tax cost of debt is 9% and the cost of equity is 14%?
| A. | 7.98% |
| B. | 10.875% |
| C. | 11.000% |
| D. | 12.125% |
| E. | It is impossible to determine WACC without debt and equity betas. |
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A Course In Derivative Securities
Authors: Kerry Back
2005th Edition
3540253734, 978-3540253730
