Question
The CFO of WWW has determined that the company's weighted average cost of capital (WACC) is equal to 12.5 percent; that is WACC = 12.5%
The CFO of WWW has determined that the company's weighted average cost of capital (WACC) is equal to 12.5 percent; that is WACC = 12.5% WWW is financed with both debt and common stock; the company has no preferred stock. Based on this information, which of the following statement is correct?
A. WWW assets have an average internal rate of return equal to 12.5%
B. the required rate of return that WWW should use to evaluate capital budgeting projects with average risk is 12.5%
C.WWWmarginal tax rate us equal to 12.5%
D.WWW cost if retained earnings is equal to 12.5%
E. The average interest rate that WWW pays on its debt [Biynds] is 12.5%
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