Multiple Choice
The weighted average cost of capital for firm X is currently 10%.Firm X is considering a new project but must raise new debt to finance the project.Debt represents 25% of the capital structure.If the after tax cost of debt will rise from 7% to 8%,what is the marginal cost of capital?
A) 8.00%
B) 10.25%
C) 10.75%
D) 12.00%
Correct Answer:
Verified
Correct Answer:
Verified
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