Question
PQR Company has the following: Borrowing rate of 7.0% Cost of equity of 25.0% Corporate tax rate of 21.0% Book value of debt = $630,000
PQR Company has the following:
Borrowing rate of 7.0%
Cost of equity of 25.0%
Corporate tax rate of 21.0%
Book value of debt = $630,000
Book value of equity = $1,250,000
Market value of debt = $630,000
Market Value of equity = $2,750,000
PQR Company's weighted average cost of capital (WACC) is:
21.6%
19.0%
21.4%
18.5%
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Financial Accounting Fundamentals
Authors: John Wild, Ken Shaw, Barbara Chiappetta
6th edition
1259726916, 978-1259726910
