Question
Tuolumne Co. issues only common stock and bonds. The firm has a debt-equity ratio of 1/3. The cost of equity is 16.0 percent and the
Tuolumne Co. issues only common stock and bonds. The firm has a debt-equity ratio of 1/3. The cost of equity is 16.0 percent and the pre-tax cost of debt is 6.0 percent. The tax rate is 21 percent. What is its weighted average cost of capital (WACC)?
a) 13.19%
b) 11.90%
c) 12.26%
d) 10.41%
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The Oxford Handbook Of The Sociology Of Finance
Authors: Karin Knorr Cetina, Alex Preda
1st Edition
0198708777, 978-0198708773
