Question
The CEO of XYZ Co. has demanded a new calculation of the WACC for the company. The capital structure consists of 65% equity and 35%
The CEO of XYZ Co. has demanded a new calculation of the WACC for the company. The capital structure consists of 65% equity and 35% debt. The cost of equity is 13% and the pre-tax cost of debt is 6.55%. With a marginal tax rate of 39%, what is the WACC?
9.85%
10.66%
8.56%
5.70%
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Accounting Tools for Business Decision Making
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
5th edition
9780470418239, 470239808, 9780470239803, 470418230, 978-1118128169
