Question
Trekkie sales has a capital structure of 60% equity and 40% debt. The firm does not issue preferred stock and the tax rate is 25%.
Trekkie sales has a capital structure of 60% equity and 40% debt. The firm does not issue preferred stock and the tax rate is 25%. The cost of equity is 15.7 percent and the pre-tax cost of debt is 11.0 percent. What is the weighted average cost of capital WACC?
a. 13.82 b. 12.72 c. 13.35 d. 10.37
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Financial Econometrics
Authors: Peijie Wang
1st Edition
0415426693, 978-0415426695
