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Your firm has a before-tax return of $2600 on an investment of $1980 and a marginal tax rate of 35%. The overall cost of capital
Your firm has a before-tax return of $2600 on an investment of $1980 and a marginal tax rate of 35%. The overall cost of capital is 9%. The firm currently uses 40% debt financing with an expected return of 6%. If it increases its use of debt to 50%, the expected return on the debt will be 6.5%. Calculate your firms WACC under the current capital structure. Round your answer to the nearest tenth of a percent.
Group of answer choices
8.2%
6.0%
6.5%
9.4%
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