Question
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
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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All About Options
Authors: Thomas McCafferty
3rd Edition
0071484795, 978-0071484794
