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A Firm Requires an Investment of $20,000 and Borrows $10,000

Question 64

Multiple Choice

A firm requires an investment of $20,000 and borrows $10,000 at 8%. If the return on equity is 20%, what is the firm's pretax WACC?

A) 15%
B) 17%
C) 14%
D) 16%

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