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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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