Balance Sheet General Talc Mines December? 31, 2014

Assets Liabilities and stockholders' Cash . . . . . . . . . . . . . . . . . . . . . . 25,000

Equity accounts payable . . . . . . . . . . . . . . . . . . . . . . . . 80,000

Accounts receivable . . . . . . . . . . 120,000

Notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350,000

Inventories . . . . . . . . . . . . . . . . . 300,000

Accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000

Total current assets . . . . . . . . . . 445,000

Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 480,000

Net fixed assets . . . . . . . . . . . . . 500,000

Long-term debts (150 bonds issued at $1,000 par) . . . 150,000

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 630,000

Stockholders' equity Common stock (7,200 shares outstanding) . . . . . . . . . . 180,000

Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135,000

Total Stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . 315,000

Total assets . . . . . . . . . . . . . . . . $ 945,000

Total liabilities and stockholders' equity . . . . . . . . . . . . $ 945,00

Source of Capital After?Tax Cost

Long?term debt 8%

Common stock equity 19

Given this after minus ?tax cost of each source of? capital, the weighted average cost of capital using book weights for General Talc Mines is? ________. (See Table? 9.3)

A. 11.6 percent

B. 16.6 percent

C.15.5 percent

D.17.5 percent