QUESTION 38

McKean, Inc. has a debt-equity ratio of 0.70 and a tax rate of 34 percent. The firm does not issue preferred stock. The cost of equity is 12 percent and the after-tax cost of debt is 6 percent. What is McKean's weighted average cost of capital (WACC)? a. 7.37 percent b. 7.98 percent c. 8.52 percent d. 8.69 percent e. 9.53 percent