"You are considering starting a firm. To see whether it s a positive NPV investment, you need to estimate the cost of capital. You have identified three publicly traded firms that operate in the same industry but have different capital structures and estimated the following values. Given the values in the table below, which of the following statements about your startup are correct?"

	D	E	0	RD	RE	R0	WACC
Firm 1	0	1.1	1	6.0%	11.5%	9.0%	8.8%
Firm 2	0.2	1.3	0.9	7.0%	12.5%	8.8%	8.2%
Firm 3	0.3	1.5	1.1	8.0%	13.5%	9.8%	8.0%
Average	0.17	1.3	1	7.0%	12.5%	9.2%	8.3%

	A.	All the averages in the table apply to the startup
	B.	E = 1.3
	C.	RE = 12.5%
	D.	WACC = 8.3%