Anson Jackson Court Company (AJC)

Multiple Choice

Anson Jackson Court Company (AJC)
The Anson Jackson Court (AJC) currently has $150,000 market value (and book value) of perpetual debt outstanding carrying a coupon rate of 6%.Its earnings before interest and taxes (EBIT) are $89,000, and it is a zero growth company.AJC's current cost of equity is 10%, and its tax rate is 25%.The firm has 10,000 shares of common stock outstanding selling at a price per share of $60.00.
-Refer to the data for the Anson Jackson Court Company (AJC) .What is AJC's current total market value and weighted average cost of capital? Total Market Value; WACC

A) $650,000; 8.9%
B) $650,000; 9.4%
C) $750,000; 8.4%
D) $750,000; 8.9%
E) $750,000; 9.4%