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Consider the information for the following four firms. Firm Cash Debt Equity rD rE ?c Eenie 0 150 150 5% 10% 40% Meenie 0 250
Consider the information for the following four firms.
Firm | Cash | Debt | Equity | rD | rE | ?c |
Eenie | 0 | 150 | 150 | 5% | 10% | 40% |
Meenie | 0 | 250 | 750 | 6% | 12% | 35% |
Minie | 25 | 175 | 325 | 6% | 11% | 35% |
Moe | 50 | 350 | 150 | 7.50% | 15% | 30% |
Which is the weighted average cost of capital for Minie closest to? (please show calculation)
A) 9.50%
B) 8.75%
C) 6.75%
D) 8.25%
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