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Question 15 Not yet answered Marked out of P Flag question Suppose that Topstone Industries has a cost of equity of 14% and a cost
Question 15 Not yet answered Marked out of P Flag question Suppose that Topstone Industries has a cost of equity of 14% and a cost of debt of 9%. If the target debt/equity ratio is 75%, and the tax rate is 34%, what is Topstone's weighted average cost of capital (WACC) Select one: a. 6.6% b. 10.9% c. 7.9% d. 10.5% e. 8.4% Question 16 Not yet answered Marked out of 1 P Flag question Your company needs some research equipment which belongs to Class 10 (CCA Rate 30%). The cost of the equipment is $850,000. You can borrow at 12% and the tax rate is 34%. You can lease the equipment for $270,000 a year for four years. It has no salvage value. What is the net advantage to leasing? Select one: a. -$8,352 b. $9,336 C. -$204,446 d. $38,477 e. -$132,000
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