Question
Find the weighted average cost of capital for a firm that has a debt-to-equity ratio of 1, a tax rate of 34%, a levered cost
Find the weighted average cost of capital for a firm that has a debt-to-equity ratio of 1, a tax rate of 34%, a levered cost of equity of 12% and a pre-tax cost of debt of 10%.
A. 9.6%
B. 7.968%
C. 8.76%
D. none of the above
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Managerial Economics Theory Applications and Cases
Authors: Bruce Allen, Keith Weigelt, Neil A. Doherty, Edwin Mansfield
8th edition
978-0393124491, 393124495, 978-0039391277, 393912779, 978-0393912777
