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Question 27 Not yet ABC CORPORATION IS A LEVERAGED COMPANY. THE COST OF EQUITY CAPITAL FOR ABC IS 10%, ITS CORPORATE INCOME TAX IS 30%,

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Question 27 Not yet ABC CORPORATION IS A LEVERAGED COMPANY. THE COST OF EQUITY CAPITAL FOR ABC IS 10%, ITS CORPORATE INCOME TAX IS 30%, AND THE FIRMS BEFORE TAX COST OF BORROWING IS 5%. IF ABC'S DEBT TO EQUITY RATIO IS 11, THEN ITS WEIGHTED AVERAGE COST OF CAPITAL K, IS (DO NOT ROUND INTERMEDIATE CALCULATIONS BUT ROUND OFF FINAL ANSWER TO 2 DECIMAL PLACES). and out of 100 P Fog Questo Select one O a. 5.00% O b. 575% Lc 6 75% Od 10.00% O e NONE OF THE ABOVE CHOICES

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