23.Jack Ltd has an equity beta of 1.4, the risk-free rate is 3.4 percent and market risk premium is 8 percent. The yield to maturity of the firms bonds is 7 percent and the debt-equity ratio is 0.5. What is the weighted average cost of capital if the tax rate is 30 percent?

Select one:

a. 11.37 percent

b. 11.65 percent

c. 10.94 percent

d. 12.60 percent

24.

Jack Ltd has a levered cost of equity of 13.84 percent and an unlevered cost of capital of 12.5 percent. The company has $5,000 in debt that is selling at par. The levered value of the firm is $14,600 and the tax rate is 30 percent. What is the pretax cost of debt?

Select one:

a. 9.93 percent

b. 8.82 percent

c. 3.68 percent

d. 8.60 percent